Rs 5-10 /litre fuel cess, double tax for 2nd vehicle proposed

MUMBAI: Car owners in the Mumbai Metropolitan Region may soon have to pay a special cess, that of Rs 5-10 for every litre petrol or diesel. And those buying a second car may have to shell out double the vehicle tax.

"We have submitted the proposal to the government. Funds generated from the cess on petrol and diesel will be used exclusively to strengthen the urban transport infrastructure in the Mumbai region. The money should be given to the BEST for the procurement of new buses and development of infrastructure," transport commissioner V N More told TOI on Thursday. "The additional vehicle tax will also be utilized for the development of mass transit system."

According to More, if the government accepts his proposal of Rs-5 cess, the total amount will work out to around Rs 200 crore and for Rs 10, the amount will be Rs 400 crore. "Whatever it comes to, the amount will be entrusted with the BMC's transport undertaking," More said.

Besides generating funds for infrastructure development, the additional taxes will also deter people from using their personal vehicles or buying second cars, which only add to Mumbai's already overburdened roads. With over 22 lakh vehicles on the streets, it is beyond the city's capacity to accept more vehicles. "We can't stop an individual from buying a car, but if we can strengthen the urban transport system, people can benefit from it. Moreover, the policy will discourage citizens from using personal vehicles," More said.

Currently, the transport department is charting a one-time vehicle tax, which is pegged at 10% of a car's cost. "If a person buys a second vehicle, then s/he will have to pay 20%. Our efforts are aimed at discouraging people from buying personal vehicles," More said.

Pointing out that the proposals have only been submitted to the government and no final decision has yet been taken, More said, "I feel the state must consider all the options to reduce vehicular congestion in the city."

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