"Luxury tax" on 2nd and 3rd cars. Info wanted.

[*Arkin_Young*]

What is the "Luxury Tax" one has to pay upon purchasing one's 2nd car in -
1. Bangalore?
2. Andhra Pradesh?
When is it levied and when is it to be paid?
Are Central GOvt. & Defence Employees exempted from this Tax?
EDIT:It is said that once a family buys its 2nd car, this tax is to be paid, is this true ? If true, what is a 'family' here?
Also, what is the tax on the 3rd car in Bangalore?

 

[Shynish M]

You are correct that there is a luxury tax applicable in Karnataka via

NOTIFICATION ​

No. FD 190 CSL 2008 (II) Bangalore, dated: 10.12.2008.

​

The draft of the following rules further to amend the Karnataka Tax on Luxuries Rules, 1979 as published as required by Section 20 of the Karnataka Tax on Luxuries Act, 1979 (Karnataka Act 22 of 1979), in Notification No. FD 190 CSL 2008, dated 4th October, 2008, published in Part IV-A of the Karnataka Gazette, Extraordinary No. 1097, dated 4th October, 2008, inviting objections or suggestions from all the persons likely to be affected thereby and notice was given that the persons likely into consideration after fifteen days from the date of its publication in the Official Gazette.

And, whereas, the said Gazette was made available to the public on 4th October, 2008.

And, whereas, no objections and suggestions have been received by the Government.

Now, therefore, in excercise of the powers conferred by Section 20 of the Karnataka Tax on Luxuries Act, 1979 (Karnataka Act 22 of 1979), the Government of Karnataka hereby makes the following rules, further to amend the Karnataka Tax on Luxuries Rules, 1979, namely.-

RULES Title and commencement.-

1. These rules may be called the Karnataka Tax on Luxuries (Amendment) Rules, 2008
2. They shall be deemed to have come into force with effect from the First day of August, 2008.

Insertion of new Rule 10-AA.-

1. In the Karnataka Tax on Luxuries Rules, 1979 (hereinafter referred to as the 'said rules'), after Rule 10-A, the following shall be inserted, namely:-
2. "10.AA. Security to be furnished.- The security to be furnished under sub-section (3) of section 9 or sub-section (6) of section 11 shall be in Form XV-A in the form of a Bank Guarantee.”

Source: SaralVAT

However, I don't have more details on this. I think, some one in govt. service can easily get the details of these rules.

 

[RSM]

Karnataka is already having highest tax rate, now for lux tax also, Karnataka is on top.

 

[Akash]

Is this "Luxury tax" only in Karnataka? I have seen many people who own more than 4 cars, but never heard of any sort of such tax from them.
Can someone throw some light on this? is it applicable for those who own more than 1 car?

 

[Shynish M]

As far as I know Luxury tax is there in almost all states, but applicable in different slabs. Recently there was some decisions made on Luxury Tax in Delhi and was in news. But please note that Luxury Tax is not limited to automobiles alone.

 

[*Arkin_Young*]

Karnataka is already having highest tax rate, now for lux tax also, Karnataka is on top.

Do you know of the rates in KA?
It would be helpful if I could know the rates in AP.

I have a doubt. If a couple owns one car registered in AP and buy another in Karnataka for use in AP, will they have to pay this tax? And where?

 

[Akash]

As far as I know Luxury tax is there in almost all states, but applicable in different slabs. Recently there was some decisions made on Luxury Tax in Delhi and was in news. But please note that Luxury Tax is not limited to automobiles alone.

so is it applicable to those who own more than 1 car? I dont think it is applicable in maharashtra since we too own 2 cars (and many of my dads friends own more than that) and i dont think we (or any of them), pay any such tax.

 

[Shynish M]

@ Arkin

Check out the Karnataka & AP RTO sites mentioned Web links to Road Transport Departments!

For tax rates in KA, you need to navigate to RTO Services > Fees, Taxes & Fine. For AP, you need to check out the Taxes & Fees sections.

so is it applicable to those who own more than 1 car? I dont think it is applicable in maharashtra since we too own 2 cars (and many of my dads friends own more than that) and i dont think we (or any of them), pay any such tax.

I too don't think that there is separate tax based on the number of automobiles owned by a person. That sounds impractical to me. However, vehicles will be charged with laxuary taxes based on the described parameters. I will try to get some info on this.

 

[*Arkin_Young*]

^Been there done that. Couldn't find much. Gosh, these sites are not what I'd call easy to navigate.
My dad is lucky. He has 2 cars, but didn't have to pay tax, as it has been given to us by the govt.!!

 

[Akash]

@ Arkin

Check out the Karnataka & AP RTO sites mentioned Web links to Road Transport Departments!

For tax rates in KA, you need to navigate to RTO Services > Fees, Taxes & Fine. For AP, you need to check out the Taxes & Fees sections.



I too don't think that there is separate tax based on the number of automobiles owned by a person. That sounds impractical to me. However, vehicles will be charged with laxuary taxes based on the described parameters. I will try to get some info on this.

Hey, can you tell what "Luxury tax" is? To whom it is applicable?

 

[Shynish M]

Luxury tax can be defined/seen as the excise levy on goods or services considered to be luxuries rather than necessities (e.g., jewelry and perfume). Luxury taxes may be levied with the intent of taxing the rich or in a deliberate effort to alter consumption patterns, either for moral reasons or in times of national emergency. This type of tax is an indirect tax in that the tax increases the price of the good or service and is only incurred by those who purchase or use the product. These type of taxes are normally implemented at the state level, just was the way taxes like octroi, entry tax, lease tax, workers contract tax, entertainment tax etc. are enforced. However, Luxury tax can be imposed at national level too.

Eg: In Denmark & Norway cars are considered to be a luxury and hence the buyer need to pay a higher amount to purchase one.

 

[*Arkin_Young*]

I don't think having a Fiat (Padmini) in your name, apart from a new i10 is a "Luxury".