Kerala State Finance Minister K N Balagopal while presenting Kerala Budget 2023 proposed to reduce tax on Contract Carriage Vehicle Operators up to 10%.
During the pandemic times, the contract carriage vehicle operators faced many difficulties. There was no source of income and was not able to pay the taxes.
To strengthen the public transport system, it was decided to give a tax reduction up to 10% for such vehicles. This was expected to result in revenue loss of about Rs. 28 crores to the Government.
According to section 2(7) of Motor Vehicles Act, 1988, āContract carriageā means a motor vehicle which carries a passenger or passengers for hire or reward and is engaged under a contract, whether expressed or implied, for the use of such vehicle as a whole for the carriage of passengers mentioned therein and entered into by a person with a holder of a permit in relation to such vehicle or any person authorised by him in this behalf on a fixed or an agreed rate or sumā
i) a maxi cab; and
ii) a motor cab notwithstanding the separate fares are charged for its passengers;
The operators will benefit considerably from the proposal to increase the tax rate reduction by 10%. As a result of finding it challenging to manage their businesses, the majority of carriage operators have currently scaled back their bus fleets and other services.
A motor vehicle that is built or modified to carry more than six people, excluding the driver, for hire or reward at separate fees paid by or on behalf of individual passengers, either for the entire voyage or for segments of it, is referred to as a āStage Carriageā in section 2(40).
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