Summary of this article
Punjab says it will consider levying a reciprocal entry tax on Himachal vehicles entering state
Issue figures in Punjab assembly, Ropar MLA shares the public concerns
Himachal's decision to increase revenue from toll fee has also met with opposition from hoteliers and business community
There is fresh trouble brewing along the shared interstate borders of Punjab and Himachal Pradesh, not over territorial claims or water disputes this time, but over the imposition of an entry fee on vehicles that are not registered in the hill state.
The trigger is the decision by the Himachal Pradesh cabinet to raise entry fees at all toll barriers for vehicles not registered in the state. The private vehicles, specifically light motor vehicles and cars, will see an increase from Rs 70 to Rs 170, effective April 1, 2026.
The measure, though, aimed at resource mobilisation, under the HP Tolls Act of 1975, after the state landed in the fiscal crisis over the centre’s decision to stop the Revenue Deficit Grant (RDG), but has sparked major protests from the neighbouring state and the people travelling, almost daily, for their jobs and livelihoods.
As per the notification issued by the Himachal Pradesh government, commercial vehicles like buses and heavy goods carriers will be charged up to Rs 600 and Rs 900, respectively.
The fee for 12+1-seater passenger vehicles will increase from Rs 110 to Rs 170, and for commercial buses from Rs 320 to Rs 600. The mini-buses will be required to pay Rs 180 instead of Rs 180, and the construction machinery Rs 800.
Raising the concern over the steep hike, Punjab MLA Dinesh Chadha, who represents Ropar, a district bordering Himachal Pradesh, asked the Punjab finance minister, Harpal Singh Cheema, for his response on how the state wants to mitigate the problem of the commuters affected by the steep hike.
He asked in the state assembly, “if any such taxation was under consideration, especially after a steep hike in the entry tax imposed by Himachal Pradesh on vehicles entering the state from Punjab ?”
Chadha also questioned that if Himachal Pradesh could pass a state act and impose a tax, then why cannot Punjab also pass an act and impose a tax on Himachal Pradesh vehicles coming to Punjab?
At this, the Punjab finance minister assured that the state government will explore the possibilities of imposing a reciprocal entry fee on all the vehicles coming to the state from Himachal Pradesh and those that have not registered in the state.
Not only this, but some other MLAs also joined the issue and mocked the deteriorating fiscal health of the hill state, where the government was finding it difficult to pay DA and other facilities to the government servants and had decided to cut down welfare measures. The state was now devising new ways to raise its resources through measures like an entry fee on vehicles.
The business community and hoteliers in the state have already protested the fee hike, fearing that tourists' vehicles coming to the state or those vehicles engaged in goods transport will be affected.
The residents of the border areas of Punjab have also been opposing the hike in the entry fee because of their mobility to Punjab for work and business located on either side of the interstate borders.
The Bhakra Beas Management Board (BBMB), which has its operations shared between Himachal Pradesh territory and Punjab, has also written to Deputy Commissioner Bilaspur asking for the withdrawal of the entry tax toll from their road on the state border.
In a letter to the Bilaspur Deputy Commissioner, the BBMB Chief Engineer stated that the road connecting Nangal Dam to Bhakra Dam, in the Bilaspur district of Himachal Pradesh, is owned and maintained by the BBMB.
Punjab and Himachal Pradesh have been historically engaged in water disputes, especially after the formation of the states under the Punjab State Recognition Act 1966 and recently after the Supreme Court decided in favour of Himachal Pradesh over its 7.19 percent share in the BBMB power.
Further, the Punjab has not transferred the assets of the 110 MW Shanan hydel project, located at Joginder Nagar in Mandi district, despite the expiry of its lease in March 2024.
Punjab has moved to the Supreme Court against the takeover of the project by the Himachal Pradesh government.
Earlier, the Punjab had also opposed the Himachal Pradesh government's decision to levy water cess on the hydel projects, a move aimed at increasing the state’s revenue. Now, the decision to hike the toll entry fee has brought the state to a new confrontation and could escalate the tension between the AAP government and Congress-run Himachal Pradesh.
The Himachal Pradesh government, however, says it was within its rights to take measures on resource mobilisation.
