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Lifetime tax, but not for life
April, 18th 2009

You use the roads, you pay for them. Fair enough. But what is irking several thousands of temporary migrants into Karnataka is the lifetime tax on vehicles that they are being made to pay, even for being in the state for a short period.

Every state, including Karnataka, mandates that vehicles owners, while migrating from one state to another, pay lifetime taxes, despite having paid them at the time of purchasing the vehicle. The worst hit are IT professionals who migrate to the city for a few months on a project or on deputation.

The lifetime tax, however, has turned into an annual affair. As per rules under Karnataka Motor Vehicles Taxation Act, 1957, the tax can be refunded from the RTO upon proof that the vehicle has been taken to another RTO in another state.

Despite this, a slab on refund exists and the vehicle owner often ends up paying lifetime tax every time the person moves to a different state.

Vehicle owners allege that non-Karnataka registered vehicles are targeted by the traffic police to frequent checks. Re-registering each time also involves a lot of paperwork.

Gaurav Aggarwal, who moved to Bangalore from Delhi two months ago for a year-long IT project, also transferred his new car to Karnataka -- he ended up paying a hefty tax. "What's the point in calling it a lifetime tax when you are asked to pay it in every state you move to?" Gaurav asked.

Among the worst hit are professionals on deputation at MNCs who are likely to stay in a state just for a few months. Other concerns include managing the huge amount that can't be met without bank loans. These loans are difficult to get as vehicle owners often don't have a permanent address. Re-registering of the vehicle also decreases its re-sale value and the insurance cover.

Joint commissioner (enforcement-South) D Vijaya Vikram told `The Times of India' that tax is levied for using the roads in the state. "A percentage of the tax can be refunded once the owner gives proof of migration to another state. For instance, if the vehicle has been in Karnataka for two years before migration, up to 89% of the tax paid will be refunded," he explained.

But what about those who come to the state for a short period (in months)? Vikram said they can produce "relevant documents" to be exempted from tax, showing that they will be in the state for a few months. On what these "relevant documents" are, he said each case is different. "It's up to the owners to convince transport officials of the short duration of their stay." Defence personnel and certain sections of central government employees are exempted from this rule.

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