Explained: What is an entry tax for luxury cars? Is Vijay the first to seek exemption from it?

The actor had brought this car in 2012 and the matter was in the court ever since. The HC directed Vijay to pay a 20 percent entry tax on his vehicle along with a penalty of Rs 1 lakh into the CM Covid relief fund within two weeks of notice.

An entry tax is levied on goods transported between different states. Essentials like milk, vegetables and other such food products will not come under the ambit of entry tax. 

Entry tax became legal from September 1, 2007 which was later subsumed by GST regime (Goods and Services Tax). 

With regards to cars, imported cars in particular, if the car lands in one part of India and needs to be registered in some other part, the payment of entry tax is a must. The car cannot ply unless the importer pays the entry tax.

Read more: Actor Vijay imposed Rs 1 lakh cost for challenging the entry tax imposed to register his Rolls Royce

Not just Vijay, but many luxury car owners opine that since the entry tax had been subsumed by the GST from July 1, 2017 and after having paid the import and customs duty, a separate entry tax was unnecessary. 

Sachin Tendulkar too came back to spotlight, for not good reasons, as people started taking his case where in 2002 he was exempted of the entry tax on his Ferrari gifted by racer Michael Schumacher. 

Also read: Income Tax raid to luxury car evasion: 5 times when Vijay made the headlines for wrong reasons

The Tamil Nadu Tax on Entry of Motor Vehicles into Local Areas (amendment) act of 2015 says, a request for exemption can be taken into account only on public interest grounds wherein the importers' entry tax will be waived-off wholly or partly.