What is One Nation One Road Tax?

One Nation One Road Tax is a proposal from the GST council to make uniform road tax across India. Road tax is paid during the registration of a vehicle in a particular state. It is levied along with the goods and services tax (GST) and directly impacts the price of a new vehicle.

Currently, Road Tax rates vary based on the States. For instance, in Delhi, the road tax is calculated based on the make, model, engine and seating capacity of a vehicle. For four-wheelers, less than 1,000 kg, the tax is more than INR 3,800. However, in Arunachal Pradesh, it is calculated on the basis of the sale price of a four-wheeler, which is 2.5% or INR 6,250 for a vehicle costing INR 2.5 lakh, and 6.5% or INR 1.3 lakh for a car costing over INR 20 lakh.

One Nation One Road Tax brings one rate of road tax all over India.For all personal vehicles, the tax would be 8% for a vehicle costing under INR 10 lakh, 10% for a vehicle costing between INR 10 lakh and INR 20 lakh and 12% for a vehicle costing more over INR 20 lakh.