August 3 , 2022
6 mins read

Transportation Tax: What it is, and How it Works

Punit Chotia
Punit Chotia
Transportation Tax: What it is, and How it Works
Transportation Tax: What it is, and How it Works
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Applying for a Transport License

A transport license is an official document a holder requires when operating a motor vehicle. It is necessary to have a transport license as they mandate it while paying transportation tax. It authorises the individual to operate vehicles on highways and other roads. This license is issued through the Regional Transport Authorities or RTO. The 2 methods of applying for a transport license are as follows:

Online

Step 1: Visit the nearest RTO or download the form from the official website.

Step 2: Fill out the form which includes name, address, date of birth and more.

Step 3: Submit proof of address with passport size photos and more.

Step 4: Select a specific slot for giving the test. RTO officers will assess your traffic knowledge.

Step 5: After passing a learner’s license is provided. Permanent is obtained after 180 days.

Off-line

Step 1: Visit the official state-based transport website e.g., www.transport.wb.gov.in to download the license form

Step 2: Fill out the entire form and submit it to your nearest RTO.

Step 3: Provide the necessary requested documents.

Step 4: Get a driving test slot for both.

Step 5: Once you pass the test, you are eligible to obtain a license within 2 to 3 weeks.

Step 6: The mentioned form can also be submitted online through the following process:

->Step 1: sarathi.nic.in

->Step 2: Click on applications for a new transport licence.

->Step 3: Click on the option for new driving licence.

->Step 4: Enter all the required details to submit documents.

->Step 5: You will be provided with an application number.

->Step 6: Schedule a driving licence test.

->Step 7: Appear for the best.

->Step 8: Pass the test and receive a licence within a few days.

It is extremely important for an individual to carry their transport licence with them at all times since a fine ranging between rupees 500 and 1000 is implemented for not possessing it. Moreover, along with the fine, a person can also be sentenced to 3 months of imprisonment since road traffic dangers are a major aspect that cannot be overlooked.

What is transport tax?

The term transport tax illustrates the taxes enforced on aircrafts, ships, and other vehicles. The government implements this tax to obtain taxes for other activities. In India, the central government implements a transportation tax on any goods delivered by road through the “goods transportation agency”.

As per section 65 (50 B) of the Finance Act 1994, this term is illustrated as any person using transportation as a means to deliver goods, and issues a consignment note. A consignment note is an important document issued by the service provider to transport goods. This note ensures that the responsibility of the goods has been transferred to the transporter.

A service tax is implemented by the government on transported goods. This service tax is 60%, out of which 40% is taxable. This percentage is implemented upon household goods specifically. For other normal goods, 70% is implemented out of which 30% is taxable.

Different types of methods are present for calculating the transportation tax for different vehicles. For instance, in the case of 2 wheelers, as per the engine capacity starting from 2.5 kilometres to 0.75 kilometres, taxes can be calculated ranging from Rs. 1500 to Rs. 6250. In addition, for four wheelers, if the engine capacity is up to 900 cc or extending to 2500 cc, taxes range from Rs. 10,000 to Rs. 32,000, as per the vehicle.

Different types of penalty rates are present through which it is ensured that transport taxes are paid on time. For instance, if the transport tax is not paid up to 15 days after expiry, no charges are made. However, if it increases up to 45, 75 or more days then 25%, 50%, and 100% taxes are charged respectively.

Throughout India, multiple states are required to pay the transportation tax which ranges from Sikkim, Karnataka, Kerala, West Bengal, Bihar, and more. In all of these locations, transportation tax is implemented to help governmental causes and facilitate overall growth.

Moreover, there is a certain time limit to apply for tax refunds. It is important for licence holders to take advantage of this, since applying at the earliest helps minimise the tax burden on the transporters working in the sector. Moreover, this specific time limit changes from state to state and it is important for every transporter to be aware of the same through an inquiry at the Regional Transportation Office.

Unfortunately, it is not possible to get a tax refund online. It is important for any individual seeking a refund to visit the nearest regional transportation office to avail an application for the same.Some of the criteria that are present in this process must be met effectively as they can help simplify it in the future.

The documents that are to be submitted in order to pay the transportation tax involve an invoice of the vehicle, registration certificate of the automobile, no objection certificate, valid insurance copy of the vehicle, proof of identity, and a form of KMVT14.

The ramifications of not paying the transportation tax are that the vehicle which has been registered will not be able to move from one state to another for more than 30 days. Thus, if a vehicle is presently in Maharashtra, it will not be able to drive into Karnataka for 30 days. Failing to pay the transportation tax can also result in a penalty being imposed upon the licence holder. ‌‌

How to pay transport tax?

Transport tax is to be paid to the regional transport office where the vehicles for which taxes are being paid are unregistered. In this location, registered documents are utilised with supporting documents to make the tax payment effective. An online method of paying transportation tax is also present through the following steps:

Step 1: Visiting: https://parivahan.gov.in/parivahan/

Step 2: Find the category of online services and click upon vehicle-related services.

Step 3: Find the specific state under which the vehicle is registered. Find the name of the state and click on it to proceed further.

Step 4: Enter the registration number of the vehicle and click on it proceeding further.

Step 5: On the next page which appears, click the payment option and proceed to pay the transportation tax.

Different types of products have different types of transportation tax implemented on them.

For instance, in the first category, it can be illustrated that agricultural products such as salt, pulses, rice, and other types of materials have a 0% transfer tax being implemented. On the other hand, specific goods such as single consignment packages which are worth less than 1500 rupees also have 0% tax levied on them. In addition, items that are not exceeding a consignment rate of Rs. 720 do not have any type of tax imposed on them either.

Any other goods which do not fall into the aforementioned categories will have a transport taxable rate of 5 per cent to 12 per cent implemented on them. However, household items being utilised for personal use will have a 0 per cent tax. Transporting goods of the 7 specified receipts will have GST charges of 12 per cent imposed on them.

All of these taxes must be implemented throughout the country and will be proposed to any transporting vehicle. These must be paid to the regional transport office and tax payers should provide all the necessary documents required such as consignment notes and more, relating to the products. This will help provide authentication for the document.‌‌

In concluding this informative piece, it is important to note how the Vahak app can prove useful with regards to the above mentioned ideas. Vahak is an application that allows hundreds of registered licence holders to deliver different consignments through small or large vehicles. The application can minimise overall risk for the consignments being transported and also focuses towards a cohesive experience being created for businesses and consumers that need to transport packages.

Vahak makes sure that a commercial driving licence or CDL is possessed by any 4-wheeler driving individual. It also takes care of your tax paying needs for any type of package as the platform includes all the charges that are required to combat these types of taxes. Therefore, if you’re paying a single amount for transporting any type of consignment, then you are paying for the taxes involved as well.

You can download the Vahak application from Playstore for Android phones, and iOS for Apple phones. For further information on transport taxes, you can also visit the official Vahak website.

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