Travel operators seek road tax relief, rollback of 3% cess in pre-budget memorandum

The Karnataka State Travel Operators’ Association (KSTOA) has submitted a detailed memorandum to the State government ahead of the 2026–27 Budget, seeking road tax rationalisation, withdrawal of the additional 3% cess on commercial vehicles, and enhanced infrastructure support to boost the transport and tourism sectors.

The association submitted comprehensive suggestions as part of the pre-Budget consultation to the Chief Minister Siddaramaiah and Transport Minister Ramalinga Reddy. The association said that the industry and transport sectors remain the economic lifeline of the State, providing employment to thousands despite economic slowdowns, fuel price fluctuations and natural calamities.

Citing official data for 2025-26, the association noted that Karnataka has a population of around 6.8 crore, with 53.6 lakh income tax filers and over 10 lakh active GST registrations. “Nearly 44% of the State’s own tax revenue comes from GST, and over 3 crore vehicles are registered in Karnataka. More than 35 lakh workers are covered under ESI, with 3-4 lakh new EPF registrations added annually,” the letter stated.

However, it flagged growing challenges faced by self-employed operators and entrepreneurs due to high road taxes, toll charges and rising operational costs. According to the association, some vehicle owners are opting to register their vehicles in other States to reduce tax burden. It urged the government to consider a rational reduction in road tax to prevent such migration and encourage registrations within Karnataka.

To help achieve the targets under the Tourism Policy 2024-29, the association sought tax exemptions or reductions for tourist vehicles, including mini buses, multi-utility vehicles. “Tax concessions and a hassle-free bilateral interstate agreement for private tourist vehicles would support seamless movement and revenue growth,” KSTOA president K. Radhakrishna Holla said.

He also demanded reconsideration of the additional 3% cess imposed on yellow-board commercial vehicles in the 2025-26 Budget. He sought exemption for operators already contributing to ESI and PF for their employees.