Open Letter to the Chief Secretary, Government of Nagaland
To
The Chief Secretary
Government of Nagaland
Kohima, Nagaland
Subject: Urgent intervention to prevent GST revenue leakage from new passenger vehicles purchased outside Nagaland and brought into the State
Respected Sir,
I wish to place before the Chief Secretary and the Government of Nagaland a matter of public and financial concern—the growing practice of residents of Nagaland purchasing new passenger vehicles from outside the state, particularly from neighboring States, and bringing them into Nagaland for permanent use and registration.
Since Nagaland, is a small state with limited revenue resource, losing substantial GST revenue, without an effective interstate entry tax mechanism, is affecting the State’s legitimate revenue interests despite the Government spending heavily on roads, bridges, public infrastructure, healthcare, education, administration and other essential services.
Where is Nagaland’s revenue going?
The vehicle purchased outside Nagaland may spend its entire useful life operating on Nagaland’s roads, as the owner may be permanently based in Nagaland, and Nagaland’s road infrastructure may bear the cost of its use.
Yet, when the vehicle is purchased outside the State, the economic activity connected with that purchase may generate significant tax and business benefits for the State where the sale takes place.
This raises a straightforward question:
If the vehicle is ultimately intended for permanent use in Nagaland, what interstate entry tax mechanism does Nagaland have to ensure that the State receives the GST revenue legally available to it?
An issue that deserves a government audit
The first requirement is reliable data to determine number of new passenger vehicles purchased from outside each year and type of usage.
Calculate the approximate revenue implications.
If, for example, thousands of such vehicles are entering Nagaland every year, even a modest amount of GST revenue associated with each vehicle could collectively bring in a significantly huge sum for the State exchequer.
It is not a minor administrative issue. It can retrieve Nagaland’s legitimate revenue.
Legality must be respected
At the same time, any action taken by the State Government must be fully consistent with the Constitution of India, GST laws, motor vehicle legislation and other applicable laws.
The demand is therefore not for an arbitrary or unconstitutional tax but, to examine every legally permissible avenue—including appropriate motor vehicle taxation, road tax, interstate entry-related taxes and charges or other mechanisms within the State’s legislative and administrative powers—to prevent avoidable GST revenue leakage.
Local dealers are also losing business
Local dealers employ salespersons, mechanics, drivers and administrative staff. They rent or own commercial premises, maintain workshops, purchase spare parts and contribute to the local economy and GST benefits for the Nagaland State.
The Government should therefore consider policies that create a fair and competitive environment for automobile businesses in Nagaland.
The Transport Department and other concerned departments can develop a coordinated digital system to identify these vehicles.
Vehicle registration records, chassis numbers, invoices and other legally available information can help establish whether a vehicle is genuinely in transit or is being permanently brought into the State.
No harassment of genuine vehicle owners
Any new system must also protect ordinary citizens.
A person who legitimately travels to another State and temporarily brings a vehicle into Nagaland should not be unnecessarily harassed.
Clear rules, reasonable exemptions and transparent procedures would prevent misuse and protect the State’s revenue.
Chief Secretary must take the lead
The Chief Secretary, as the senior-most administrative authority of the State, is ideally placed to coordinate with the concerned departments and arrive at a logical conclusion.
An inter-departmental committee should be constituted comprising Transport, Finance, Taxes and other relevant authorities to examine the matter and place findings before the Government:
• The number of new vehicles entering Nagaland from outside the State;
• The number subsequently registered in Nagaland;
• The estimated annual GST revenue implications;
• The existing legal provisions;
• The practices followed by many other States; and
• Recommendations for plugging any identified GST revenue leakage.
An appeal to the government
I therefore earnestly appeal to the Chief Secretary, Government of Nagaland, to take immediate cognizance of this matter and call for a comprehensive assessment, to understand the magnitude of the problem, which will enable the State to take appropriate corrective measures.
Nagaland’s financial resources belong to the people of Nagaland, so it must be protected.
The Government should act promptly to establish a fair, transparent and legally sustainable interstate vehicle entry tax mechanism, wherever legally permissible. Stop the Bank staff acting as agents of vehicle dealers outside the State.
The people deserve to know how much GST revenue Nagaland is losing each year, the reasons thereof, and what concrete steps the Government proposes to stop it.
Yours faithfully,
Kuolachalie Seyie,
A Concerned Citizen of Nagaland and Advisor Angami Vehicle Dealers’ Association Nagaland
