Kerala mulls tax collection system for All India Permit Buses to overcome central ban | Kerala News

Thiruvananthapuram: The state government is exploring alternative methods to collect road taxes from buses operating with All India Tourist Permits, following the Centre’s decision to halt the existing system. One proposal under consideration is the launch of new software to facilitate tax collection as these buses enter Kerala’s borders. 

The move comes after the National Informatics Centre (NIC) disabled the option to collect taxes via the Vahan portal, which operates under the Union Ministry of Road Transport and Highways. In response, Kerala’s Motor Vehicles Department is planning to develop and implement its own tax collection software while simultaneously preparing to challenge the Centre’s decision in the High Court. 

The All India Tourist Permit system, introduced by the Centre in 2021, was designed to streamline inter-state bus operations by implementing a unified national tax, with the revenue shared among states. In compliance, Kerala had exempted such buses from paying state road taxes until September 30, 2023. 

However, Tamil Nadu later introduced a condition that buses holding All India Permits must still pay the state’s road tax upon entering its territory. At the same time, it also continued o receive a share of the central tax pool. Following suit, Kerala adopted a similar policy and resumed collecting taxes from All India Permit vehicles from April 1, 2024. 

For buses with 40 seats, Kerala charged ₹3,000 for for pushback seats and ₹2,250 for regular ones. However, since this tax was levied for an entire quarter even for a single visit, it caused outrage among the bus operators. Many buses began deboarding passengers at the state border to avoid the levy. Bus operators subsequently approached both the High Court and the Supreme Court to challenge the decision. 

The Supreme Court granted a stay on tax payment but later referred the matter to the High Court, stating that the subject fell within the state’s jurisdiction. The Kerala High Court later upheld the state’s right to collect the tax. 

In its recent budget, the state government reduced the tax rates to quell the growing protests. The rate for pushback seats was brought down from ₹3,000 to ₹2,000, and for regular seats from ₹2,250 to ₹1,500. 

However, bus operators approached the centre alleging that Kerala was not adhering to the unified tax framework. Following this, the tax collection option for these vehicles was removed from the Vahan portal, now prompting the state to consider technological and legal alternatives. 

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