Tax saving drives private bus operators to use out-of-State vehicles

Private bus operators use vehicles registered in other States, or Union Territories, to ferry passengers over long distances in order to save on tax due to differential rates.

While conclusive data on how many such buses are regularly plying the roads in Telangana was not immediately available, anecdotal evidence suggests that a significant number of buses have, for instance, registration number plates from Nagaland or Arunachal Pradesh, or a Union Territory.

A 2022 Telangana government order throws light on taxes prevailing in the State. The prescribed tax slabs for different classes of vehicles, and their respective passenger carrying capacity. The quarterly tax for vehicles permitted to carry over a dozen passengers and ply contract carriages that are permitted by All India Tourist Permit, meaning long-distance buses, the rate is ₹4,000 per seat, per quarter. Contrast this with other locations, the taxes are lower.

Speaking to The Hindu, Transport Commissioner of Odisha Amitabh Thakur, a State where the ill-fated bus was registered, said that fitness test of the vehicle was done in Silvaasa Dadra Nagar Haveli Daman and Diu.

He explained that the tax in Odisha for buses is around ₹4,000 per seat, per year. “There are two types of carriages — stage carriage and contract carriage. Secondly, the All India Tourist Permit rate is across India which enables [long-distance] buses to travel on all contract carriage routes. The bus was registered in Rayagada recently,” he said, adding that the August 2018 registration document records the bus as an ‘AC Sleeper Coach’.

According to other sources in the Odisha Transport department, the bus entered Odisha in April 2025. Taxes are being paid since then in that State, added. The source explained that in order to monitor re-registrations, a No Objection Certificate is sought, which is obtained from an executive magistrate. It is then submitted to the Transport department of the State where re-registration is sought.

Meanwhile, in Telangana, officials of the Transport department said that the number of long-distance buses registered in the State are few. “Telangana has less than 100 private long-distance buses. We get to see buses registered in other parts of the country plying long-distance routes so as to save on the tax component. Once an All-India Permit is available, operators can ply buses on all available routes,” a senior transport officer said.

While buses largely have all documentation, including permits, in order, non-compliance in generally seen with vehicles not being equipped with first-aid kits, and more importantly, in case of emergencies and road accidents and fire hazards, hammers to smash glasses. “Largely all buses are insured on time, as long-distance travel with a large number of passengers is a risky affair,” the officer said.