Himachal Pradesh Entry Tax Hike Sparks Protest in Punjab Border Towns

The Himachal Pradesh government’s decision to increase entry taxes has sparked sharp reactions in bordering areas of Punjab, particularly among daily commuters and traders.

The revised rates, effective April 1, 2026, raise entry tax from ₹70 to ₹100 for local commuters and from 70 to 170 for five-seater vehicles registered outside the state. Commercial vehicles are facing hikes of up to ₹800.

“Illegal and Unjustified”: Local Leaders

Paramjit Singh Pamma, municipal councillor from Nangal and former president of the District Bar Association, termed the hike “illegal and unjustified.”

He alleged that Himachal Pradesh is the only state imposing entry tax on vehicles registered in other states and criticised the steep increase — nearly 30% for border residents and around 150% for others.

According to Pamma, residents of Punjab’s border areas who commute daily to Himachal for work or business may now have to pay nearly ₹4,000 per month.

Reciprocal Tax Demand

The Nangal Municipal Council had passed a unanimous resolution in June 2025 seeking imposition of a reciprocal tax on Himachal-registered vehicles. However, Pamma claimed that the Punjab government has yet to act on the proposal and urged it to clarify its position.

Legal Challenge in High Court

Advocate Uttansh Monga has moved the Himachal Pradesh High Court, challenging the legality of the entry tax.

He argued that imposing entry tax on vehicles travelling via national highways is unconstitutional and amounts to double taxation. “People are being forced to pay both Himachal’s entry tax and National Highways Authority of India toll,” he stated.

Citing RTI data, Monga claimed that Himachal collects approximately ₹150 crore annually from vehicles registered outside the state.

Protest Plans and Revenue Concerns

Residents of Rupnagar (Ropar district) are reportedly planning protests and meetings with their MLAs over the issue.

Sources suggest that the tax hike may be aimed at compensating for the loss of Revenue Deficit Grant (RDG) funds. However, critics argue that the move could adversely impact local businesses and GST collections, while escalating inter-state tensions.

The controversy highlights growing fiscal pressures and the complex balance between revenue generation and regional economic cooperation.

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