Centre allows Kerala to reinstate tax on tourist permit vehicles

Thiruvananthapuram: The central government has stepped back from its earlier stance of preventing Kerala from levying tax on All India Tourism Permit (AITP) vehicles. Following a request from the state government, arrangements for collecting the tax will soon be integrated into the ‘Vahan’ software. As a result, vehicles entering Kerala with an AITP issued elsewhere will be required to pay quarterly tax ranging from ₹35,000 to ₹41,000, depending on their seating capacity.

The National Informatics Centre had withdrawn the software facility for tax collection in May, after a section of private bus operators in the state submitted a petition to Union Minister Nitin Gadkari, prompting central intervention.

The centre’s latest decision comes in the wake of a High Court ruling affirming the state government’s authority to determine road tax. For several years, private bus operators and the Kerala government have been at odds over the AITP scheme, introduced by the centre in 2021 with the stated aim of preventing tourists from facing hurdles caused by varying tax structures across states.

Also read: Suspension of inter-state bus service to Kerala enters third week

Private bus owners argue that when centralised tax is paid, states should not be permitted to impose additional levies. The Kerala government, however, has informed the centre that luxury buses operating under the guise of AITPs have been running parallel services within the state. The centre had also expressed displeasure over misuse of the permit.

The union government is now preparing to amend AITP regulations. Proposed changes include mandatory online submission of passenger lists to the Motor Vehicles Department (MVD) and issuing permits with the condition that such buses must not operate as regular route services. The amendment is expected to be released soon.

Criticism over revenue share

Private bus owners have criticised the state for accepting its share of central AITP permit revenue while simultaneously opposing the conditions of the permit, calling out the move’s double standards. The state government has countered that the amount received represents Kerala’s due share of the tax paid by vehicles obtaining AITP permits from the state.