Vehicle Registration Racket: Owners Find New Ways to 'Bypass' Tax in State

Prakash Samaga
Daijiworld Media Network - Mangalore

Mangalore, Aug 22: A huge tax evasion racket wherein expensive vehicles are registered outside the state and then brought in, has come to light. The practice has made a big dent in the state exchequer, but the officials of the department concerned, however, are content to turn a blind eye to this hi-tech method of fraud.

A network of such agents is active in the state and is helping many to successfully evade huge amounts of tax rightfully due to the Karnataka state government.

Registering a vehicle in Karnataka involves paying the registration fees and other taxes. For a car costing Rs 1 crore, approximately Rs 10 lac will have to be paid as tax. However, with the help of these agents, owners can register their vehicles in Pondicherry where the approximate registration fee for a vehicle valued at Rs 1 crore, is Rs 50,000 at the most.

Once fake proof of address is produced, the owners register their vehicle in Pondicherry and pay tax to that state. But basic facilities like roads and bridges used by them are provided by the Government of Karnataka!

The vehicle owners do not even need to go to Pondicherry for the purpose. There are enough agents is places like Bangalore, Mangalore, Dharwad, and Mysore among others. They charge Rs 50,000 to Rs 1 lac as commission for their ‘work’. With this, the owner of the car evades about 90 percent of  the tax he would be liable to pay otherwise.

It is not just Pondicherry, but vehicles bearing registration numbers of other states are also rapidly increasing in the city.

At times, actual residents of Pondicherry or other states might visit the city. These are people whose purpose is not tax evasion. They will just have to get permission from the regional transport office (RTO) by paying the specified tax.

When contacted by this correspondent, C Mallikarjuna, RTO, Mangalore, said that the matter has come to their notice, but due to the ongoing Anna Hazare protest and lorry strike, it has been pushed to the background. The RTO department will soon inform the public of the issue and keep a watch on vehicles bearing registration numbers of different states.

“Time will be allotted to vehicle owners to prove that they have business in both the states and keep travelling with permission. Failure to do so may even lead to seizure of the vehicle. The issue will be fully sorted within a year,” he said.