State can’t collect entry tax on vehicles having all-India permit

The National Informatics Centre (NIC) has blocked its online portals for the Transport Department of Himachal Pradesh, which was charging entry tax on tourist vehicles registered under the All India Tourist Permit (AITP) policy of the Central Government. The NIC has blocked its online portals for the collection of entry tax on the direction of the Union Ministry of Highways and Surface Transport.

The union ministry, in a letter to the Deputy Director General of the NIC, had given the order to stop states from charging entry tax on tourist vehicles which already had the All India Tourist Permit (AITP) issued by the ministry.

In a letter, a copy of which is available with The Tribune, the Union Ministry for Highways and Surface Transport stated that it had taken the decision for strengthening of the AITP system by disabling the border check post module for the collection of border tax on the Parivahan Portal from vehlcles plying under the AITP. The ministry had notified the All-lndia Tourist Vehicles (Authorisation or Permit) Rules in March, 2017, in supersession of the Motor Vehicles (All-lndia Permit for Tourist Transport Operators) Rules, 1993, to facilitate seamless movement of tourist vehicles throughout the territory of lndia.

Subsequently, the ministry notified All lndia Tourist Vehicles (Permit) Rules, 2023 on April 18, 2023 which superseded the All India Tourist Vehicles (Authorisation or Permit) Rules, 2021. The permit granted to tourist vehicles under the AITP Rules is a contract carriage permit, the ministry has stated.

The Union Ministry of Surface Transport’s letter states that the All-lndia Tourist Vehicles (Permit) Rules, 2023, provide that the fee collected with the application to the All-lndia Tourist Permit shall be disbursed among all states and union territories. The fee so collected is being distributed among the states and the union territories on a monthly basis. However, the ministry has received various representations that some states are still levying taxes in the form of passenger tax, border tax and check post tax on tourist vehicles plying under the All lndia Tourist Vehicles (Permit) Rules, 2023.

The matter has been examined in the ministry and it has been decided that the border check post module be disabled for collecting border tax from vehicles plying under the strength of AITP, the union ministry letter states.

Bhupinder Pathak, Deputy Director General, NIC, admitted that the NIC had disabled its portals for the collection of entry tax for Himachal. The decision had been taken on the directions of the Union Ministry of Surface Transport, he added.

Sources said that the state Transport Department would now have to collect entry tax on vehicles at entry barriers in the state in cash. However, it can create logistic problems at state entry barriers and traffic jams. Besides the tourist vehicles entering the state can use multiple routes to escape state tax. The state transport department can also develop its own portals for collection of tax from tourist vehicle which may take time and cause revenue loss to the state.

Himachal Tribune