State can collect tax on BH series non-transport vehicles: Kerala High Court

Fri Jan 10 05:09:37 UTC 2025: ## Kerala High Court Rules States Can Set Taxes on BH-Series Vehicles

**KOCHI, January 10, 2025** – The Kerala High Court ruled Thursday that state governments have the authority to independently set tax rates for Bharat Series (BH-series) non-transport vehicles. The decision came in response to a petition filed by Central Government employees challenging the state’s refusal to register their BH-series vehicles at the centrally prescribed rate.

Justice D.K. Singh’s ruling declared sub-rule (2) of Rule 51B of the Central Motor Vehicle Rules, which dictates the BH-series tax rate, unconstitutional. The court found that setting tax rates for motor vehicles falls under the exclusive purview of state governments, as per Article 246 and Entry 57 of List II of the Seventh Schedule of the Indian Constitution. While the central government can establish principles for taxation, the actual tax rates remain the domain of individual states.

The BH-series registration, introduced to ease vehicle transfers between states for government employees and defence personnel, will now see varying tax rates across different states. The court’s decision effectively overturns the central government’s attempt to standardize taxation for these vehicles.