THIRUVANANTHAPURAM: The transport department’s recent decision to unify the contract carriage tax has sparked concerns among budget tour operators. Under the new tax revision, vehicles without push-back seats are now subject to an additional 32% tax. These vehicles, which make up 90% of the contract carriage fleet, will be significantly affected, while luxury vehicles, accounting for only 10% of the fleet, will see less impact.

The Contract Carriage Operators Association (CCOA) has criticised the move, stating that the increased tax is unaffordable for self-employed vehicle owners. The association has expressed frustration over the lack of response from the government to their concerns.

“We have yet to receive a favourable response from the finance and transport departments. If this situation continues, we will be forced to take direct action, including tax protests and marches to the Secretariat,” said a joint statement by CCOA president Binu John and general secretary S Prasanthan.

The association highlighted the substantial tax increase, noting that the tax on a seven-seater vehicle has risen from Rs 1,960 to Rs 2,450, while the tax for a 49-seater bus has jumped from Rs 33,320 to Rs 44,100.

“The sharp rise in taxes will make it difficult for ordinary people to hire contract carriages for various purposes, including budget tours. This weak demand could drive thousands of entrepreneurs out of business,” Prasanthan said.

Despite these concerns, the transport department defended its decision to standardise the tax rates. “The unification of tax rates has been a long-standing demand. Most other states have a unified tax system, and this will help vehicles from other states comply with Kerala’s tax structure. It is also challenging for the Motor Vehicles Department (MVD) to monitor separate tax rates for vehicles with and without push-back seats. It is time that the facilities on contract carriages are improved to enhance passenger comfort,” said an MVD officer.