Pune: The Ministry of Defence (MoD) has issued a notification to abolish the Vehicle Entry Tax (VET) in certain cantonments, including Pune, Ahmednagar, and Aurangabad. The notification was issued over a year after scrapping the decades-old Vehicle Entry Fees in January 2022.
These cantonment authorities continued to charge commercial vehicles under the guard of the ministry’s 2022 order in which it had only mentioned “fee” and not tax.
The latest notification, issued on Monday, will incur a loss of about Rs 13 crore for the Pune Cantonment Board, which has already been facing financial difficulties for a few years. “Our contract VET will get over in June this year. We were in the process of floating a fresh tender. However, we have lost a major source of revenue generation. It is a big blow,” a PCB official said.
There are 13 VET collection centres in the PCB limits. Five cantonments out of 19 in the Southern Command limit were collecting VET from commercial vehicles.
A section of officials from the Directorate General Defence Estates (DGDE) were stunned by the ministry’s move, saying that it would further weaken the cantonment.
“As there is a growing demand from citizens to merge with municipal corporations, this move would further augment it. For instance, citizens of the Secunderabad cantonment in Telangana are keen to merge with the Greater Hyderabad Municipal Corporation. This move would cripple the financial status of cantonments further,” said an official from the DGDE.
But other officials noted that the MoD has released significant funds for cantonments in 2023. “It [the latest notification] would certainly disturb cantonments financially. But at the same time, they are getting significant funds from the ministry, which would help them look after basic expenditure,” another official said.
