Rich dodge ‘hefty’ life tax on high-end cars in Telangana

HYDERABAD: A Rolls Royce zooming through Hyderabad’s streets for the last three years has not been registered anywhere in the country, even as enforcement authorities said they will intensify the drive against owners of luxury cars who have not paid taxes.
The owner of the Rolls Royce, which is worth Rs 11 crore, had been delaying the payment of life tax amounting to over Rs 1 crore. The remaining cars, including Maserati, Lamborghini and Ferrari, that were seized on Sunday, were found to have been registered in Puducherry, New Delhi, Tamil Nadu and Maharashtra.

Enforcement officials of the transport department had seized 11 cars on Sunday for tax evasion in surprise checks.Authorities said that owners of luxury cars have to pay double or more in life tax in Telangana as compared to other states and that it could be as high as Rs 50 lakh here. “The difference in the amount of life tax that one has to shell out in the state is the reason why even the super-rich evade the tax,” said authorities.
They said that five out of 11 cars were registered in Puducherry where the life tax amount for a luxury car is almost negligible, around Rs 14,000 for one year, while Maharashtra has an upper limit of Rs 20 lakh.
“In Telangana, 13% of invoice value has to be paid as luxury tax and for a Rs 4 crore luxury car, it could come to Rs 50 lakh. Therefore, many of these cars have been registered elsewhere and were plying here,” said Papa Rao, enforcement officer, transport department, Telangana, adding that the owners of all the 11 cars will have to pay the tax.
All the cars seized near Shamshabad by RTA authorities were released after the authorities received affidavits from the owners. Interestingly, a few owners had pleaded that they did not know how the taxes were to be paid. The cars were returned to the owners after they agreed to pay the taxes and affidavits to this effect were obtained.
“Two luxury car owners turned up at our office today to pay the dues. We have handed over the vehicles to the owners after obtaining the documents and a commitment as they had requested us to allow them to keep the vehicles in their custody,” said the official, adding that many of these owners were knowingly evading the tax.