All India Permit tax row: Kerala suffers Rs 10 crore loss after Centre halts tourist vehicle tax

Thiruvananthapuram: Kerala has been unable to overcome the central government’s decision to stop the collection of tax from All India Tourist Permit vehicles. Although the state had earlier announced that it would approach the court against the central ban, it has not been able to do so.

More than 500 private buses operate daily to the state. It is estimated that Kerala has suffered a tax loss of ₹10 crore so far.

It is also alleged that the state has not made any effort to overcome the central ban, despite the Supreme Court ruling in previous cases that the state government has the authority to collect road tax. Allegations suggest that this inaction is intended to help private bus drivers.

In a case brought before the High Court against the non-grant of Bharat registration, the court ruled that the state government has the authority to determine the tax. Still, the state government is not ready to take further action in the All India Permit case.

The Centre had stopped the collection of tax in the state on buses with All India Tourist Permits in May last year. This section was removed from the 'Vahan' software used for tax collection without the permission of Kerala.

The action by the Ministry of Road Transport followed a petition made by private bus owners to the Union Transport Minister. Tax was previously collected through the software as per the instructions of the state government. This is the first time the Centre has taken such a step without the state’s consent.

Protesting the Centre’s decision, Kerala's Minister for Transport, K. B. Ganeshkumar, had announced that he would take legal action against the Centre’s move.

It was also considered to introduce special software to collect tax on the model of Himachal Pradesh. However, that plan too did not work.