Telangana may replace three-tier bus tax with 'One State, One Tax' system

The Transport Department of Telangana is exploring a single, uniform tax system for tourist buses across the State, replacing the current three-tier quarterly tax structure. The proposed ‘One State, One Tax’ system aims to simplify tax obligations and enable seamless movement of tourist buses without requiring multiple permits.

Transport Commissioner K. Ilambarithi chaired a meeting with tourist bus operators on Friday to discuss the proposed changes. According to the department, the existing system levies quarterly taxes under three separate slabs: single district tax, two district tax, and a State-wide tax. The move seeks to replace this structure with a more uniform State-wide tax system.

Speaking to The Hindu, Mr. Ilambarithi explained the present rates: single district tax is about ₹1,150 per seat per quarter, two district tax is about ₹1,510 per seat per quarter, and the State tax is ₹3,500 per seat per quarter. A study is underway to determine how these slabs can be rationalised into a single framework.

“The erstwhile districts were large in size, so buses could operate on a one-district permit. They used to take a temporary permit, valid for seven days, to travel to another district. But the districts are now much smaller, and more in number. Similarly, a two-district permit costs about ₹1,510,” he said, adding that operators tend to “overuse” the temporary permit.

The department’s objective is to bring simplification without imposing an additional burden on operators. The revenue currently collected from over 8,000 tourist buses is only ₹110 crore, which the department considers modest. A comparative study of models followed in Kerala and Karnataka is also part of the exercise.

“It [One State, One Tax] is in the preliminary stage. The honourable Minister [Ponnam Prabhakar] had suggested that we study One State, One permit. As part of this, various representatives of associations came forward and we heard them,” Mr. Ilambarithi said.

A second aspect of the study involves private buses operating on All India Tourist Permits (AITPs). Under this scheme, buses are registered in States where taxes are lower than those in southern Indian States, leading to a revenue loss for Telangana. At present, the State earns only ₹7 crore from such vehicles.

According to Mr. Ilambarithi, States such as Andhra Pradesh and Kerala have reduced taxes, and the feasibility of Telangana lowering its existing AITP tax of ₹4,000 is being explored. “Our intent is not to charge more from operators but to bring about simplification and rationalisation,” he clarified.

The meeting also touched upon the proposed gathering of transport commissioners from different States to discuss AITP monitoring, following a tragic bus crash near Kurnool in Andhra Pradesh. Mr. Ilambarithi said the meeting will be convened soon to address safety and regulatory concerns associated with interstate tourist buses.

The department is expected to finalise its recommendations after completing the ongoing studies and consultations with stakeholders. The move, if implemented, would mark a significant shift in how tourist buses are taxed in Telangana, potentially easing compliance for operators while ensuring a steady revenue stream for the State.