Gopabandhu Mohapatra

One Nation One Road Tax is a proposal from GST council to make one road tax across the country just like the Goods and services tax. Currently, there are different taxes across the country in different states according to the pre-decided rates but now it is being discussed to apply a single rate of road tax across the nation.


The government of India led by Ministry of Road Transport and Highways has proposed a road tax structure that is expected to make the current road tax system more organised and uniform across the country. A Group of Ministers (GoM) constituted by the Ministry of Road Transport & Highways has recommended a uniform structure of road tax for vehicles across states. This would also bring necessary relief to genuine cases requiring the transfer of vehicles. The proposal is also considering doing away with the re-registration of a vehicle after relocation to another state either due to transfer or otherwise.

As per the proposal before the ministry, vehicle owners have to pay life-time tax while purchasing the vehicle. The owner need not re-register the vehicle by getting a no objection certification from the RTO, where the vehicle was originally registered and pay road tax in the new place. Instead, the owner can retain the same registration number. However, the individual has to apply for a change of address.

The proposal also will mitigate states’ fears about losing tax. Instead, the road tax revenue from the new vehicles will be pooled and same would be shared among all the states proportionately. A similar sharing of road tax collection in issuing national permits was successfully implemented by the Transport Ministry a few years back. “A similar model can be adopted for the registration of new vehicle as well,” said an official from the ministry.

The first bill related to road tax came into existence in 1914, which was replaced by MV Act 1939. A working group was constituted in 1984 to overhaul the process and a new act was passed by both houses of parliament on Oct 14, 1988 and is therefore referred  as the Central Motor Vehicles Rules (CMV) 1988. Road Transport being the state list of the Constitution of India, only the state legislature is competent to make laws regarding taxation of vehicles.

vehicle tax

Karnataka State took first initiative and went a step further and amended the Motor vehicle taxation, known as Karnataka Motor Vehicles Taxation (Amendment) Act 2014. This act says that ‘’any vehicle plying continuously in Karnataka for more than 30 days needs to pay the Hefty Life Time Tax levied by the Government Of Karnataka’’  which is against the CMV 1988 which states that any motor vehicle plying continuously in other state needs to be registered in 12 months.

The crackdown started by Karnataka officials while checking Non-Karnataka cars has created a wave of terror amongst people coming from other states. Cases were filed in The Hon’ble High Court of Karnataka against the recent MV Taxation Amendment and got a stay order on this MV Amendment.

Slowly, other states have tried to follow Karnataka and states like Telengana, Kerala and some more states have also framed rules to pay yearly road tax upon one month of arrival. These state amendments are against the freedom of movement, which our constitution guarantees and are also against the spirit of the constitution’s provisions and federal principles.

national road taxRoad tax will be there but it will be uniform road tax across the country. After GST, it’s now One Nation-One Road Tax that the government is pushing for and will improve the overall movement of vehicles across the state borders.

Benefits from the new provisions will be:

  1. Uniform road tax will discourage buyers to get their vehicles other than their home states that have the comparatively lower rate of one-time road tax.
  2. Vehicle owners moving from one state to another will not have to go through harassment and the refund will be easier if unified online database for vehicles registered will be made.

Hence the need to implement One Nation-One Road Tax policy, which will help us to DRIVE WITHOUT BORDERS.

“Once ‘one nation one registration tax’ comes into effect, it would enable a more transparent tax regime.

Mr. Gopabandhu Mohapatra is a retired banker and writes on a variety of subjects with a focus on Banking and Finance. He can be reached at


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