Hyderabad: With 123 tourist buses shifting their registration out of Telangana over five years, costing the state Rs 5.31 crore in annual motor vehicle tax, the transport department has proposed a steep reduction in quarterly tax on All India Tourist Permit (AITP) buses from Rs 4,000 to Rs 1,800 per seat.The proposal, which seeks to make Telangana more competitive with neighbouring states and bring back buses that migrated to other states to take advantage of lower taxes, has been sent to govt.“The proposal is under consideration. It is aimed at making Telangana competitive with other states and retaining tourist buses registered here,” transport commissioner K Ilambarithi told STOI.An internal committee constituted by the transport department recommended the 55% reduction after examining representations from contract carriage bus operators’ associations and comparing Telangana’s tax rates with those in other states. According to the committee’s report, Telangana currently has only 110 AITP buses registered in the state. The department estimates that the migration has resulted in an annual tax loss of Rs 5.31 crore at the existing rate.The exodus was particularly pronounced in 2023-24, when 68 buses moved out of Telangana. Another 15 shifted in 2024-25 and 13 in 2025-26. Of the 123 buses that obtained no-objection certificates to move their registration, 71 went to Nagaland, 25 to Andhra Pradesh and five to Arunachal Pradesh. The remaining buses moved to nine other states and Union Territories.The report attributes the migration largely to the wide disparity in state motor vehicle taxes. Nagaland charges about Rs 375 per seat per quarter and Arunachal Pradesh Rs 407, compared with Telangana’s Rs 4,000.The disparity has widened following recent tax reductions in other states. Andhra Pradesh lowered its quarterly tax on AITP contract carriages from Rs 4,000 to Rs 2,500 per seat in June, while Karnataka reduced the rate for sleeper coaches from Rs 4,000 to Rs 3,000 per berth. Maharashtra charges Rs 1,750 per seat per quarter, while Goa charges Rs 1,800. Telangana’s existing rate is now the highest per-seat rate among the 11 states and Union Territories compared by the committee.The department has proposed bringing the rate down to Rs 1,800 per seat per quarter, placing Telangana at Rs 700 below Andhra Pradesh and Rs 1,200 below Karnataka. The committee said the proposed rate would improve the state’s competitiveness without matching the lowest rates in the country.
