Sikkim: Motor vehicle department slashes tax rates by up to 20 per cent after stakeholder pushback

The Sikkim Motor Vehicle Department has issued a revised notification, lowering motor vehicle tax rates across various categories. This decision comes after the previous hike in tax rates sparked objections from the public and transport-related stakeholders, prompting the government to review and reduce the rates by 10-20 per cent in some categories. The revised rates are expected to provide much-needed relief to vehicle owners, both private and commercial, throughout the state.

The new notification, released by the Government of Sikkim's Motor Vehicle Division under the Transport Department, seeks to make vehicle ownership more affordable. It applies to motorcycles, motor cars, omnibuses, and goods transport vehicles. The reduction in tax rates is authorized under the Sikkim Motor Vehicles Taxation Act, 1982, and will take effect from October 1, 2024.

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For motorcycles, the revised rates offer significant reductions, ranging from Rs 500 per year for smaller engine capacities (80cc and above) to Rs 3500 for larger motorcycles exceeding 501cc. Motor cars have also seen lower tax rates, with vehicles under 900cc now taxed at Rs 2400 per year, and those with engine capacities over 2000cc taxed at Rs 8000 annually.

In the case of omnibuses registered as non-transport vehicles, those with seating capacities beyond 10 will now be taxed at Rs 10,000, plus an additional Rs 500 for each extra seat. Transport vehicles and goods carriers will also benefit from tax reductions based on their gross vehicle weight (GVW), ranging from vehicles under 500 kg to those exceeding 15,000 kg.

Additionally, the revised notification introduces several incentives. Vehicle owners opting for a one-time tax payment for five years can avail a 20% rebate. For those replacing old, polluting vehicles with new ones, there is a 15% concession valid for eight years. Moreover, electric, hybrid, and flexi-fuel vehicles have been granted full exemption from motor vehicle taxes, encouraging the adoption of eco-friendly transportation.