Telangana’s transport department has proposed cutting the quarterly motor vehicle tax on All India Tourist Permit tourist buses by 55%, from Rs 4,000 to Rs 1,800 per seat, after 123 buses shifted their registration out of the state over five years. The proposal is intended to make Telangana more competitive with neighbouring states and encourage operators to bring their registrations back.
The proposal has been sent to the state government for consideration, according to transport commissioner K Ilambarithi, who told the Times of India that the measure aims to retain tourist buses registered in Telangana. The department currently has only 110 AITP buses registered in the state.
An internal committee formed by the transport department recommended the reduction after examining representations from contract carriage bus operators’ associations and comparing tax rates in other states. The department estimates that the movement of buses has cost Telangana Rs 5.31 crore in annual motor vehicle tax at the existing rate.
The migration was most pronounced in 2023-24, when 68 buses moved out of Telangana. A further 15 shifted in 2024-25 and 13 in 2025-26. Of the 123 buses that obtained no-objection certificates to transfer their registration, 71 moved to Nagaland, 25 to Andhra Pradesh and five to Arunachal Pradesh. The remaining buses moved to nine other states and Union Territories.
The committee attributed the migration largely to differences in state motor vehicle taxes. Nagaland charges about Rs 375 per seat per quarter and Arunachal Pradesh about Rs 407, compared with Telangana’s Rs 4,000. The gap has widened after tax reductions in competing states.
Andhra Pradesh reduced its quarterly tax on AITP contract carriages from Rs 4,000 to Rs 2,500 per seat in June. 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.
The committee’s comparison of 11 states and Union Territories found that Telangana’s existing per-seat rate was the highest among those examined. If approved, the proposed Rs 1,800 rate would be Rs 700 lower than Andhra Pradesh’s and Rs 1,200 lower than Karnataka’s. It would match Goa’s rate while remaining above the lowest rates recorded in Nagaland and Arunachal Pradesh.
The proposal highlights how inter-state tax differences can influence where commercial passenger vehicles are registered, even when they operate across state borders. For Telangana, the transport department’s calculation links the tax structure not only to operator costs but also to the state’s ability to retain its registration base and associated revenue.
The proposal remains under consideration by the state government. No final decision or implementation date has been announced.
