MV Tax Amendment Bill passed for imposing 10% road safety cess

The Legislative Assembly on Thursday (March 05) cleared AP Motor Vehicles Taxation (Amendment) Bill, 2026 enabling the government to impose 10% road safety cess on vehicles liable to pay life tax. 

It is intended to mobilise financial resources for continuous road maintenance, corrective engineering, black spot improvement and road safety infrastructure.

Transport Minister Mandipalli Ramprasad Reddy said that road safety has emerged as a critical public policy priority as a large number of road accidents, fatalities and injuries have been occurring in the State. 

These accidents were attributable to engineering deficiencies, inadequate enforcement, poor road geometrics, and lack of protective structures, insufficient road markings and signage and absence of systematic road safety interventions.

To address these issues in a sustained manner, and keeping in view the considerable reduction in the vehicle cost payable by buyers due to the slashing GST on motor vehicles by Government of India from 28% to 18%, the government resolved to mobilise additional revenue by levying a nominal cess on vehicle owners through an amendment to AP Motor Vehicles Taxation Act of 1963.

The cess is to be paid at the time of registration of vehicles, and the Bill replaces AP Motor Vehicles Taxation (Amendment) Ordinance, 2026. It will generate nearly ₹22.50 crore revenue per month for the State exchequer.