Plan to sell your car? Pay up to 25% tax

The state assembly on Monday cleared Mumbai Vehicle Tax (Gujarat Amendment) Bill 2010 and the Gujarat Value Added Tax-VAT (Amendment) Bill 2010. The first bill aims to levy up to
25% motor vehicle tax on sale of second-hand cars and other vehicles.

The VAT Bill aims to allow the state government
to increase the existing tax slab on tobacco products by 5%.

Leader of opposition Shaktisinh Gohil criticised the state government for introducing new tax on second-hand vehicles. Gohil said, "Second-hand vehicles are mostly used by the middle-class as utility but the state government now will tax it which is an injustice to the middle-class. Instead of levying tax on second-hand vehicles, the government should promote it through incentives.''

However, transport minister Amit Shah who introduced the bill, said: "Allegations of the leader of opposition are baseless and without understanding. He should not create a myth in people's minds that the government is levying tax to hurt the middle-class.

Actually, many people sell their vehicles to get benefit of depreciation under Income Tax Act. The government is not going to get any big income out of it but this wrong practice will be brought under control. The government will publish the detailed notification regarding nominal tax on old vehicles soon. The upper limit of tax is being fixed as 25%.''

Finance minister Vaju Vala also tabled the Gujarat VAT (Amendment) 2010 Bill which aims at increasing taxes on tobacco by 5%. The Congress criticised this move and said that it will increase smuggling from other states.