The Telangana government has proposed a significant 55 percent reduction in quarterly taxes for tourist buses to prevent operators from registering their vehicles in other states. This strategic decision addresses a growing trend of bus owners seeking out lower tax structures elsewhere, which has cost the state millions in revenue.

The Mechanics of the Proposed Tax Cut

Transport department data reveals the specific adjustments under consideration to make local vehicle registration more financially attractive.

• The quarterly tax on All India Tourist Permit buses is proposed to drop from ₹4,000 to ₹1,800 per seat.
• Over the past five years, 123 tourist buses have migrated their registration out of Telangana.
• This exodus resulted in an estimated annual motor vehicle tax loss of ₹5.31 crore.
• The majority of relocated buses moved to Nagaland, while others registered in Andhra Pradesh and Arunachal Pradesh.

Transport Commissioner K. Ilambarithi noted that the proposal is currently under government consideration. By setting the rate at ₹1,800, Telangana aims to improve its competitive standing against neighboring states.

Broader Regulatory Context

The transport department is also exploring a One State, One Tax system to simplify current tax structures for tourist buses. Minister Ponnam Prabhakar has encouraged the department to study the feasibility of a streamlined approach to replace the existing three-tier tax structure. These regulatory shifts are designed to improve compliance and support the local tourism transport sector.

By lowering levies and simplifying administration, the state hopes to retain transport businesses and foster a more competitive local industry.