Waiver of MV tax arrears: Odisha govt to lose Rs 500 cr, say experts 

The Odisha Commerce and Transport Department has decided to provide a one-time waiver/concession of motor vehicle tax arrears and penalties for old vehicle owners. The Cabinet recently approved a proposal of the department to this effect. However, experts have warned of its severe repercussions on the state exchequer. 

While it may come as a respite for vehicle owners, some questions are being raised on the prudence behind such a decision. Why this decision was taken and to serve whose interests? Are vehicle owners not keen on the scrapping policy? Or is this an attempt of the Commerce and Transport department to hide its inefficiency?    

As per the Cabinet decision, commercial vehicle owners will get a complete waiver of their vehicle tax arrears and penalties if they choose to scrap and de-register their vehicles. However, the owners of less-aged vehicles who want to carry on their businesses can avail a concession on taxes.

Some experts said that the amount of tax arrears and penalties could be approximately Rs 500 crore, which the state exchequer will stand to lose following the waiver decision. So the question many are asking is why motor vehicle taxes are not collected in time and why officials of the department have fallen behind in the motor vehicle tax collection.
 

Subrat Nanda, an expert on Road safety said."The total amount of tax arrears and penalty is no less than Rs 500 crore. The state exchequer will incur a loss of Rs 500 crore in case of the waiver of tax arrears and concession in penalties. There is a need for stern action against the officials who are responsible for failure in the collection of taxes and penalties.” 

As per official data, owners of over 50,000 commercial vehicles have defaulted on their taxes. Despite tax recovery notices and special drives, arrears were collected only from 4,668 owners in 2022.
As per the rule, in case of delay in tax payment, commercial vehicle owners are charged up to a 200 percent penalty. The defaulters face cumulative penalty. When the amount becomes high, owners find it difficult to pay up.
 
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Pranab Parija, president of Khodha Zilla Truck Owners’ Association said,” There is provision of penalty from 15 percent to 200 percent for default. If owners are not financially sound, they will face problems.”

Debendra Sahu, secretary of the State Private Bus Owners’ Association said, "The decision is music to ears, but there is no clarity about what exactly are the details. Many owners have died and there is no trace of their vehicles. When we take old vehicles to the scrapping centres, documents show that lakhs of rupees are pending against the vehicles.”