All India Tourist Permit vehicles are allowed to operate across India after paying a fixed national permit fee; rules clearly specify that states cannot collect additional taxes from such vehicles but TN and Karnataka have been violating these provisions, particularly since the last year
Kerala, TN tourist buses to suspend services over interstate tax dispute
Kerala, TN bus operators plan to suspend services over unlawful taxes at state borders even after paying a fixed national permit fee under All India Tourist Permit rules
Interstate tourist bus services operating between Kerala and the neighbouring states of Tamil Nadu and Karnataka are set to grind to a halt from 6 pm on November 10.
The decision, announced by the Luxury Bus Owners Association, Kerala state committee, marks a significant escalation in a long-running dispute over what operators describe as illegal taxation and harassment at state borders.
Meanwhile, Tamil Nadu bus owners too are poised to completely suspend their inter-state bus operations.
The All Omni Bus Owners Association of Tamil Nadu, along with counterparts from Kerala, Karnataka, Andhra Pradesh, and Puducherry, have announced the suspension of all omni bus services between these states effective from 5 pm today. This move comes after Kerala and Karnataka authorities have imposed hefty fines on Tamil Nadu-registered vehicles.
Sources said that the issue with interstate buses paying taxation fees at borders has cropped up after the Bengaluru-bound Volvo bus from Andhra recently caught fire and killed 19 people, which has led to border checks becoming more stringent.
Complaints of Kerala bus owners
According to the Kerala bus owners association, buses operating with valid All India Tourist Permits are being repeatedly stopped, fined and detained, despite being protected under national regulations. State president A J Rijas and general secretary Maneesh Sasidharan said the situation has reached a point where operators can no longer function safely or sustainably.
“The decision has been forced upon the operators, as neighbouring states have begun levying heavy fines, imposing unlawful state-level taxes, and seizing all India tourist permit buses belonging to Kerala operators," said Rijas.
Also read: Why bus services from Tamil Nadu to Kerala are stopped
The association has formally appealed to the Kerala transport minister and the transport commissioner to intervene urgently. In a letter written to the state transport minister, they have also requested that the matter be taken up with the governments of Tamil Nadu and Karnataka as well as the ministry of road transport and highways.
In Tamil Nadu, state transport minister SS Sivasankar has stepped in, summoning association leaders for talks today to avert a prolonged crisis. The bus owners in Tamil Nadu are ramping up their protest after Kerala officials began enforcing tax collection at the borders in the past week.
Tax collection at borders
Under the Central Government’s Motor Vehicles Act, AITP vehicles are allowed to operate across India after paying a fixed national permit fee. The association argues that the rules clearly specify that states cannot collect additional taxes from such vehicles. However, they alleged that Tamil Nadu and Karnataka have been violating these provisions, particularly since the last year.
The association said that Tamil Nadu has been collecting arbitrary taxes from Kerala-registered tourist buses despite having no authority to do so under the national permit framework.
The association's general secretary Maneesh Sasidharan told The Federal, “For over a year and a half, Tamil Nadu authorities have been collecting tax arbitrarily from Kerala-registered vehicles, causing repeated harassment to operators and passengers."
Tamil Nadu officials often behave aggressively, stopping buses at midnight and forcing passengers to disembark in the cold. The tax burden can go up to ₹50,000 a week. "How can any business survive that?” asked Sasidharan.
What began as sporadic checks reportedly escalated into routine detentions, with buses held for long hours and operators compelled to pay heavy penalties to continue their journeys. Karnataka, too, has now begun enforcing similar measures, with multiple instances of bus seizures and steep fines being reported in recent weeks.
Clear violation
Despite holding valid permits, operators say their vehicles are stopped at borders, asked to produce documents that are not required under AITP regulations and fined for reasons unrelated to compliance. The Kerala association noted that these actions constitute a clear violation of the All India Tourist Permit Rules.
“Despite holding valid AITPs issued under the Central Government’s Motor Vehicles Act, tourist vehicles from Kerala are being stopped, fined, and detained in Tamil Nadu and Karnataka. These actions are in clear violation of the All India Tourist Permit Rules, which explicitly exempt such vehicles from any additional state taxes once the prescribed national permit fee is paid,” read the letter by the bus owners.
Also read: Kerala warns of tit-for-tat move during Sabarimala season after TN stops KSRTC buses
The dispute has also placed immense pressure on drivers, who often bear the brunt of confrontations at border checkpoints. Operators say many drivers now fear crossing into neighbouring states due to unpredictable enforcement and the risk of vehicles being impounded.
Several have reportedly refused to undertake interstate trips, leading to mounting concerns about vehicle safety and financial loss.
The association underlined that this suspension of services should not be mistaken for a protest or strike. Instead, they described it as an unavoidable step taken for survival.
Kerala's approach
What has added complexity to the situation is Kerala’s approach over the past year. According to the association, the Kerala government has intentionally refrained from retaliatory actions in order to foster a cooperative resolution. Rather than imposing countermeasures on vehicles from Tamil Nadu or Karnataka, Kerala had opted to maintain dialogue and avoid escalation.
“During this period, the Kerala government had taken a very sympathetic and supportive approach, refraining from retaliatory measures in the hope of a cooperative resolution,” the association noted.
Kerala operators told The Federal that they had urged their own government to act, as they had been facing this situation for a long time, and the Tamil Nadu busses were plying without these costs resulting in enforcement of the law in this side of the border too.
“We have been hit with heavy fines for the last eighteen months, while Tamil Nadu buses moved freely because our government did not impose matching penalties. We kept bringing this to the government’s attention and now, with no other option, Kerala has also begun enforcing fines — and suddenly they feel the pinch. It is only fair that the rules apply equally to everyone," added Maneesh Sasidharan.
However, with the issue worsening and no signs of relief from the neighbouring states, operators say they are left with no option.
The goal, they said, is to ensure that the all India tourist permit framework is implemented uniformly across southern states. Without such clarity and enforcement, operators fear that the livelihoods of hundreds of drivers, crew members and owners will remain at risk.
Disruptions expected
The letter ends on a note of cautious optimism. “The association expressed confidence that with timely intervention from the Kerala government and the Central authorities, the issue can be resolved amicably and normal interstate tourist operations can resume soon,”.
With the suspension set to take effect on November 10, passengers planning interstate travel will be among the first to feel the impact. Unless a resolution is reached quickly, the shutdown could disrupt tourism, affect weekend and holiday travel and strain transport availability across the region. For now, the industry and travellers alike wait for government intervention to break the impasse.
Impact in TN
Meanwhile, in TN, the suspension of inter-state buses will affect over 600 buses and 25,000 daily passengers – including Sabarimala pilgrims.
A joint statement of associations said, "Operators have been pushed to a point where they can no longer run services between these states due to penalties and taxes. A single inter-state bus now incurs nearly ₹4.5 lakh in quarterly taxes across multiple states – an unsustainable financial burden."
Tamil Nadu private bus owners association's Anbalagan, addressing the media earlier, condemned Kerala's detention of over 30 Tamil Nadu buses last week, which resulted in ₹70 lakh in fines (₹2-3 lakh per bus) for alleged permit lapses.
"These buses hold valid AITP permits; no further state taxes should apply. Kerala's actions at Ernakulam and border checkpoints like Walayar and Kaliyakkavilai are retaliatory and unfair," he said.
The suspension, which began partially on November 7 evening for Kerala routes, now extends to Karnataka and Andhra Pradesh due to similar fines – Karnataka alone collected ₹1.15 crore from over 60 intercepted buses. Talking about the fallout due to the suspension of services, Anbalagan said the impact will be felt by hundreds of passengers, including Ayyappa devotees, who will be stranded.
"We will refund passengers' money and suggest alternate travel, but this protest is our last resort," he added.
Streamline taxation
Their key demand to the Centre is to create a separate permit category exclusively for omni buses to streamline taxation and eliminate state-level disputes.
"The central government must provide a dedicated permit for the omni bus sector to protect livelihoods and ensure seamless inter-state travel," Anbalagan stated in a release. Intra-state services within Tamil Nadu will continue uninterrupted, the release clarified.
Meanwhile, the TN's transport department views the crisis as a "reciprocal enforcement" fallout from the 2021 AITP regime, where states like Kerala and Karnataka claim Tamil Nadu still levies taxes on their buses despite the national framework.
Minister Sivasankar, who has previously warned operators against fare hikes during festivals, is prioritising dialogue over confrontation.
Sources close to the department indicate the minister's office confirmed the afternoon meeting at Chennai's Secretariat, expecting a "smooth resolution" to resume services by evening or tomorrow.
"The government is committed to protecting passenger rights and operator viability. These talks will address tax overlaps and push for central intervention," an official said.
