Punjab mulls tax on Himachal vehicles after hill state hikes entry fee

Chandigarh: Punjab govt is considering a tit-for-tat tax on vehicles coming from Himachal Pradesh less than a month after the hill state increased entry fee for vehicles from other states.

Punjab shares an over 250km-long border with Himachal, and people from the state go back and forth not just for tourism but to visit relatives.

On Feb 19, Himachal govt hiked entry fees for various categories of vehicles, the steepest rise being for private cars — from Rs 70 to Rs 170. Punjab residents weren't happy about it and the matter was raised in Vidhan Sabha during question hour on Wednesday by AAP MLA Dinesh Kumar Chadha.

The ruling party lawmaker asked if Punjab govt was considering levying an entry tax on vehicles entering the state as Himachal has done. Finance minister Harpal Singh Cheema replied that under GST framework there is a principle of "one nation, one tax", and states generally cannot impose such taxes on each other. He described the Himachal govt's decision to raise entry tax as "unfortunate", and suggested the neighbouring states "financial troubles" may have triggered the decision.

Cheema said he would request the local govt department to examine legal provisions to see whether municipal corporations and municipal councils in Punjab could be empowered to impose a similar levy on vehicles coming from Himachal.

Chadha argued that if Himachal could impose such a tax by passing a law in its assembly, then Punjab govt can do the same. Cheema clarified that Himachal, being a hill state, enjoys certain special provisions that allow it to enact different kinds of legislations.

Joining the discussion, Speaker Kultar Singh Sandhwan remarked that even village sarpanches have powers to impose certain local levies and asked govt to examine the matter.

Cheema said that he, along with ministers for PWD and local govt department, would discuss the issue with the Advocate General. "If the law permits, we will impose the tax. There is no issue," the finance minister told the House.

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