Chandigarh: In a move that could escalate inter-state tensions, the Aam Aadmi Party (AAP) government in Punjab is exploring the possibility of levying an entry tax on vehicles registered in Himachal Pradesh.
Finance and excise and taxation minister Harpal Singh Cheema informed the Punjab assembly on Wednesday that Punjabis considering this reciprocal measure following the Sukhvinder Singh Sukhu-led Congress government’s decision to charge vehicles entering Himachal from April 1, 2026.
Cheema also slammed the Sukhu government for making an “exorbitant” increase in the entry tax on vehicles from other states and asserted that it did so because it was on the verge of being “bankrupt”.
Cheema was replying to a question from Rupnagar MLA Dinesh Chadha who asked whether the government was considering a proposal to impose an entry tax on vehicles entering the state (similar to Himachal).
Cheema pointed out that under the ‘One Nation, One Tax’ theory, no state can impose any tax on another state.
The controversial hike in Himachal Pradesh under the HP Tolls Act will see entry fee for private cars and light motor vehicles jump from ₹70 to ₹170. Commercial vehicles face even steeper escalations, with buses and heavy goods carriers to be charged up to ₹600 and ₹900, respectively.
While the Sukhu government justifies the move as essential revenue mobilisation following the discontinuation of the Revenue Deficit Grant, the decision has sparked widespread outrage among daily commuters and transporters in Punjab’s border districts who claim it amounts to double taxation.
Cheema stated that he intends to coordinate with the local bodies minister to evaluate whether municipal councils situated along the Punjab-Himachal border can independently implement these entry fees on HP-registered vehicles. Notably, the Nangal municipal council in Rupnagar district has already passed a resolution seeking to collect toll from the vehicles registered in HP. However, that resolution is still pending with the local bodies department.
Assembly Speaker Kultar Singh Sandhwan also announced that the tax is pinching people living in border areas the most.
Cheema also said he will consult the advocate general and legal experts before finalising the framework.
