Karnataka to Introduce Vehicle Registration Cess for Welfare of Transport Workers from February

Starting in February, vehicle buyers in Karnataka will face an additional charge during registration, with two-wheelers incurring a cess of ₹500 and cars ₹1,000. This move, part of the Karnataka Motor Vehicles Taxation (Second Amendment) Bill, 2024, is aimed at funding welfare initiatives for transport industry workers.

The new cess will contribute to a social security fund established under the Karnataka Motor Transport and Other Allied Workers’ Social Security and Welfare Act, 2024. The fund, managed by a welfare board, is designed to address the needs of around 30 lakh individuals employed in the transport sector, including drivers, mechanics, and support staff.

Transport Minister Ramalinga Reddy explained that the cess will ensure a steady flow of resources to improve the lives of transport workers. The welfare board will oversee the effective use of these funds. Officials from the Transport Department estimate that the cess will generate ₹300 crore annually.

This initiative mirrors the Karnataka Building and Other Construction Workers Welfare Fund, which is financed through a cess on construction activities. The government aims to replicate its success in creating a sustainable welfare mechanism for transport workers. The Bill was presented by Law and Parliamentary Affairs Minister H K Patil on behalf of Transport Minister Ramalinga Reddy in December 2024.