Odisha Govt exempts arrear MV tax, penalty to encourage scrapping of old vehicles

Bhubaneswar: Odisha Cabinet today decided to exempt arrear Motor Vehicle Tax.

Under the proposed scheme, the tax and penalty will be exempted fully for those who want to scrap and de-register their vehicles. Similarly, the penalty will be exempted along with some portion of the tax as per the age of the vehicle, those who want to carry on their transport business by depositing the tax at a concessional rate.

Thereby, owners of old vehicles will come forward to scrap and deregister their vehicles. Similarly, the vehicle owners of less-aged vehicles who want to carry on their businesses will be able to deposit the tax at concessional rates.

“It has come to the notice of the Government that arrear Motor Vehicle tax and penalty is pending against more than 50,000 vehicle owners. Despite tax recovery notice and conduct of special drive, arrear tax has been collected only from 4,668 owners in the year 2022,” an official source said.

The reason for such pending arrear tax is a default on the part of vehicle owners in depositing the tax in time for a certain period. This leads to the imposition of cumulative penalty on defaulting owners as per rule. When the amount becomes high, owners are unable to deposit the same.

In some cases, owners approach the legal forum for waiver of the penalty because the litigation continues. Further, as a measure of restricting vehicular emission, the Ministry of Road Transport & Highways, Government of India has issued an advisory to phase out old and polluting vehicles and requested States/UTS to announce a one-time waiver of pending liabilities for swift scrappage of vehicles.

Such an initiative would attract owners of old vehicles to come forward to deregister the old vehicles by scrapping in Registered Vehicle Scrapping Facility (RVSF) Centers which is being done scientifically without any pollution.

Taking into consideration the above facts, the Government in Commerce & Transport Department has decided to announce a one-time waiver/concession in arrear MV tax and penalty.

Notably, very old vehicles will be out of the road, the defaulting vehicle owners will benefit to a great extent, and ultimately, the Government will be able to recover a substantial amount.