Keralam Assembly passes Kerala Motor Vehicles Taxation (Amendment) Bill

The Assembly on Wednesday passed the Kerala Motor Vehicles Taxation (Amendment) Bill, 2026 that provides for setting up approved vehicle seizure yards in all taluks in Keralam to store vehicles seized for non-payment of tax within the State.

The Left Democratic Front (LDF), who opposed the Bill, alleged that the financial memorandum claimed the Bill would not involve any additional expenditure from the consolidated fund of the State even though takeover of land or day-to-day functioning of the yard would entail expenses. This was a violation of Assembly rules requiring accurate details of expenses from the consolidated fund to be provided. Moreover, the Bill was silent on whether the newly introduced renewal fee and storage fee would be considered as government income and added to the consolidated fund or the private yard operators would get it. The maximum fee that could be charged or the guidelines for it had not been included in the Bill and would result in excessive power to the executive.

Minister for Transport C.P. John said the yards would be operated in PPP (public-private partnership) mode. Therefore, no apprehension need arise about expenses from the consolidated fund.

The issue in the State was insufficient space for storing the seized vehicles; these were just dumped somewhere.

On the issue of vehicle modifications that was pointed out by the LDF, the Minister said only those modifications that were not dangerous would be permitted. However, the issue of vehicle modification was separate from that of setting up vehicle seizure yards, Mr. John said.

Under the new law, fees for transporting the seized vehicle to these yards and parking fees for storing them there will be collected from the owners. Even if proof of tax payment is produced, the vehicle will be released only after these fees are paid in full. The government will determine the fee rates at a later stage.