₹2K for two-wheelers, ₹5K for cars, and ₹10K for heavy vehicles: Telangana proposes road safety cess on new vehicles

Hyderabad: Telangana government has proposed a road safety cess on all newly registered vehicles in the state.

The proposal forms part of a Motor Vehicles Taxation (Amendment) Bill introduced in the Telangana Legislative Assembly on Friday.

The move was aimed at strengthening road safety measures and reducing accidents.

Cess structure for New Vehicles

As per the Bill, buyers of new vehicles will have to pay a one-time Road Safety Cess at the time of registration: Rs 2,000 for two-wheelers, Rs 5,000 for cars and light motor vehicles, and Rs 10,000 for heavy vehicles.

Transport Minister Ponnam Prabhakar, while replying to the debate in the Assembly and Legislative Council, said the cess would apply only to newly registered vehicles. Autos and tractor-trailers, particularly those used for agricultural purposes, will be exempted.

Supreme Court guidelines behind the move

The Minister said the decision was taken in accordance with directions and guidelines issued by the Supreme Court of India on road safety and accident prevention. Several states, including Kerala and Karnataka, are already collecting a similar cess at the time of first registration, he pointed out.

Emphasis on accident prevention

Expressing concern over the rising number of road accidents and fatalities, Ponnam Prabhakar said the government’s primary objective was to save lives, not merely raise revenue.

He noted that while Telangana traditionally observes Road Safety Week, the government has expanded it into a month-long Road Safety Campaign this year to intensify public awareness.

₹300 crore annual revenue expected

Officials estimate that nearly nine lakh new vehicles are registered in Telangana every year, with two-wheelers accounting for more than half of them.

With the introduction of the Road Safety Cess, the government expects to mobilise around ₹300 crore annually, which will be utilised for road safety infrastructure, awareness programmes, and accident prevention measures.

At the same time, the proposal is likely to increase the financial burden on new vehicle buyers, particularly families purchasing two-wheelers and entry-level cars.

Quarterly tax replaced with Life Tax

The Bill also brings a major change in vehicle taxation by abolishing the quarterly tax on light transport and goods vehicles and replacing it with a one-time life tax. For goods vehicles, the life tax has been fixed at 7.5 per cent.

For vehicles brought from other states and re-registered in Telangana, the tax rates will be 6.5% if the vehicle is less than three years old, 5% if it is between three and six years old, and 4% if it is more than six years old.

These provisions will apply only to eligible categories, while autos and tractor-trailers remain outside the ambit, the Minister said.

Automated Driving Test System planned

The Transport Minister also announced that Telangana would soon introduce Automated Driving Testing Stations, on the lines of those functioning in Delhi.

The system will rely on computer-based evaluation to assess driving skills, reducing human intervention and improving transparency in issuing driving licences.

Road Safety Committees and EV Push

To further strengthen enforcement, the government is setting up District Road Safety Committees and rolling out traffic awareness programmes in schools with UNICEF’s support.

Highlighting environmental concerns, the Minister said the state’s Electric Vehicle policy had helped curb pollution levels, even though it resulted in significant tax concessions.

With the proposed amendments, the government aims to balance revenue generation with a broader goal of safer roads and reduced fatalities across Telangana, Prabhakar added.