Thiruvananthapuram: The central government has blocked Kerala’s collection of road tax from All India Tourist Permit (AITP) buses, citing unified tax policies under its jurisdiction.

The move, directed through control of the ‘Vahan’ software system used for tax collection, was executed after a petition from private bus owners reached Union Minister Nitin Gadkari.

The Ministry of Road Transport and Highways subsequently instructed the National Informatics Centre (NIC), which maintains the software, to suspend tax operations related to AITP buses in the state.

The earlier structure

Until now, the NIC had implemented tax structures as per Kerala’s transport department directives. The state began levying road tax on AITP buses two years ago, following a High Court ruling which affirmed that state governments held the right to determine road taxes within their territories.

The AITP scheme, launched by the Centre in 2021, aims to create a seamless system for tourist buses by eliminating the need for varying road taxes across states. The latest directive reinforces that AITP vehicles are exempt from separate state-level tax requirements.

Contest in court

However, Kerala’s Transport Department, citing legal advice, is preparing to approach the High Court to contest the Centre’s directive. The state maintains that it possesses constitutional authority to levy road tax and that the Centre has overstepped its remit. It is being argued that this interference undermines state autonomy and disrupts revenue streams.

Kerala had introduced the tax partly in response to concerns over AITP buses operating like regular interstate service buses, impacting the Kerala State Road Transport Corporation (KSRTC). Consequently, the state mandated quarterly tax payments—ranging from ₹35,000 to ₹41,000 depending on seating capacity—with sleeper coaches taxed at three times the base rate. Entry into Kerala was allowed only upon tax payment.

The state has relied on the Vahan software, a centralised digital system used nationally since 2018, without prior objections from the central government. The recent intervention is thus being perceived as an unprecedented infringement on state powers.

Meanwhile, Girish, owner of Robin Bus and a longstanding critic of the state’s AITP tax stance, has dismissed Kerala’s plan to take legal action as futile. He claims the state’s position lacks legal merit and is unlikely to hold up in court.