Vehicle Entry Tax Threatens To Take Shine Off Himachal As A Tourism Destination

Manali: The beauty of Himachal Pradesh has always been a tempting draw for tourists from around the country, and it is the responsibility of the state government to keep this fortune accessible to all. Just to increase state revenues, we must not forget the expensive value of our natural wonders and the livelihoods of those who depend on the tourism sector. Finding a more fair approach to taxation is the need of the hour to ensure that Himachal continues to attract visitors for generations to come.

As the government stands firm in its stance, it is imperative to strike a balance between revenue generation and ensuring that Himachal Pradesh remains a welcoming destination for tourists.

As the delicate autumn breeze sweeps through the majestic valleys of the hill state, a storm of concern is growing among hoteliers, tour operators, and all those who depend on tourism for their livelihoods. The cause of this fear is the entry tax recently imposed by the Himachal Pradesh Transport Department on tourist vehicles, a move that threatens the state wide tourism industry.

The new tax, imposed just this September, mandates that all tourist buses, tempo travellers, taxies and similar vehicles registered in other states entering Himachal must pay an additional charge of Rs 5,000 per day. This tax applies even to vehicles carrying All India Tourist Permits (AITP), a levy that is being resisted by tour operators.

While the government defends the entry tax as a means to generate much-needed revenue, the penalty for the tourism sector is becoming painfully clear as it threatens to deter tourists from choosing Himachal Pradesh as their preferred travel destination.

Notably, the impact of this tax is poised to be felt most acutely in the states of Gujarat, West Bengal, and Maharashtra, Punjab, Haryana whose residents have been frequent visitors to Himachal. Many of these tourists arrive by train in Ambala or Chandigarh and then hire tempo travellers or tourist buses to explore the beautiful landscapes of Himachal. The imposition of this tax has made it financially unviable for tour operators to bring travellers from these states.

The repercussions of this decision are not limited to the transport industry alone. The tourism sector is a complex network, and every thread matters. The occupancy rates of hotels in Himachal Pradesh rely heavily on these tourists who utilize tourist buses and tempo travelers, taxes. With their numbers declining, the jobs of many in the hotel and hospitality business are now at risk.

The discontentment triggered by this tax has spilled over into protests in several states, including Punjab, Haryana, and Chandigarh. Taxi operators from these regions are demanding a revision in the tax system, emphasizing its detrimental impact on their financial stability.

The timing of this tax could not be worse for the Himachal Pradesh tourism industry. Since the outbreak of the COVID-19 pandemic, tourism has been a rollercoaster ride of uncertainty and hardship.

There were glimmers of hope in the first quarter of 2023, but the monsoon season unleashed devastation on the state, further hampering the industry’s revival. Now, with this entry tax in place, the road to recovery seems more treacherous than ever.

Deputy Chief Minister Mukesh Agnihotri, who also oversees the Transport portfolio, said on September 6th that luxury buses registered in other states operating in Himachal Pradesh without proper permissions would be subject to a daily charge of INR 5,000 starting from September 1st. This measure, he argued, is aimed at bolstering state revenue.

However, the application of the entry tax to vehicles registered under All India Tourism Permits (AITP) has raised eyebrows. Despite advisories from the Centre urging state governments not to impose such charges on AITP-registered vehicles, Minster maintains that states retain certain rights in this matter.

As the government stands firm in its stance, it is imperative to strike a balance between revenue generation and ensuring that Himachal Pradesh remains a welcoming destination for tourists.

While generating income and curbing illegal business practices are undoubtedly important, it should not come at the expense of an already vulnerable industry. Instead, the government must actively explore alternative methods for financial sustainability and devise effective means to curtail the operation of unauthorized vehicles. Also, the state government should reconsider its stance on AITP-registered vehicles and align its policies with the recommendations of the central government.

Significantly, these strategies should be implemented in a manner that does not discourage visitors from experiencing the awe-inspiring beauty of this state. Crucially, these strategies should be implemented in a manner that does not discourage visitors from experiencing the awe-inspiring beauty of this state.

Join the Conversation


  1. says: Vishwas Patankar

    This is perhaps the best decision taken by the government of HP. Contrary to the fears envisioned by the tourism industry, this is a step in the right direction. Himachal has been reeling under the relentless onslaught of tourists in numbers far greater than the state can possibly accomodate. In the immediate future a reduction in the number of tourists is not improbable. But this could lead to more viable alternatives.

    Firstly, this will increase the business of HP registered tourist buses immediately. Tourists can come upto a certain point at the border of Himachal and Punjab by whichever means of road transport, after which they can effortlessly be onboarded to HP buses and tourist cars to travel further on. Those visiting places connected by the rail network need have no fear of travel. Neither will air tourists have a grouse.

    If Himachal can introduce electric buses and cars, it will do an additional favour to the environment. The recent floods have shown how HP is unable to sustain the physical load of lakhs and lakhs of visitors raiding it every summer. Being mountainous terrain, it has its geographical limitations owing to the fragility of the ecology.

    Tourism must be considered in tandem with the environment because without it, tourism cannot thrive. All those inter-connected in the threadwork of tourism need to absorb this and work in conjunction with the government of Himachal Pradesh to sustain themselves and their state going ahead.

    Avay Shukla is a retired IAS officer of Himachal and resides near Shimla. He has been in charge of the forests in HP for a long time. His expertise could be sought in building a viable bridge across the opposite banks of environment protection and revenue generation.

  2. says: Rajneesh

    Foolish Idea, who will let himachal transporters pick up tourists from chandigarh Punjab and outside stations? While being an IAS, what policy did you make to solve any of problems of Himachal Tourism. Both Shimla and Manali developed as hill slums in last 3 decades, what was brigade of IAS and HAS was doing during such haphazard development? All gyan comes after retirement

Leave a comment
Leave a comment

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.