Contribution By Chandan Shah
Nihang Sikhs imposed a symbolic ‘Khalsa Tax’ on the Kiratpur Sahib-Manali National Highway, forcing the state governments of Punjab and Himachal Pradesh into emergency diplomatic talks to prevent the disruption of a crucial commercial route. The entry tax saga The controversy started with Himachal Pradesh’s proposal to increase its entry tax on vehicles from outside the state. The proposal met immediate protests from Punjab and Haryana, where cross-border movement for trade and tourism is a significant economic activity. There have been concerns raised by the travel industry and the transport sector regarding the financial implications of the proposed hike.
The existing system was already charging exorbitant rates: Rs 100 for cars, jeeps and vans per entry; Rs 130 for vehicles with six to 12 seats; Rs 100 for tractors; and up to Rs 800 for heavier commercial vehicles. While these amounts may seem small to an individual, they add up for regular commuters and traders who cross state borders, and this led to months of protest.
What is Khalsa Tax? Why Nihang Sikhs are collecting it?
The protest began on October 24, 2022 when Nihang Sikhs staged a counter-action at the Gara Mora toll plaza on the Kiratpur Sahib-Manali highway. They collected Rs 5 from vehicles from Himachal Pradesh entering Punjab, as a symbolic “Khalsa Tax”, in retaliation for an unfair tax being imposed by the government of Himachal Pradesh.
Nihang Achar Singh, leading the protest, articulated the group’s grievance clearly. The Punjab and Himachal governments, he argued, had ignored their concerns about a tax that would harm cross-border movement and commerce. He declared the entry tax illegal and demanded its removal.
More significantly, the Nihangs attached a timeline to their grievance. They gave both governments ten days to resolve the issue, warning that failure would prompt them to impose a permanent “Khalsa Tax” on Himachal-registered vehicles. This ultimatum placed both administrations on notice of potential disruption to a major trade and tourism route.
Government Response and Conspiracy Theories
Himachal Pradesh’s response was sharp and defensive. Revenue Minister Jagat Singh Negi characterised the “Khalsa Tax” as unlawful and ill-conceived, calling for a Punjab government investigation. More notably, Negi suggested the action was not spontaneous but part of a coordinated effort pointing to its timing alongside another border incident as evidence of orchestration.
Negi also defended the entry tax itself, clarifying that it was neither new nor unique to the current government.
In the past, both Congress and BJP administrations imposed similar taxes, and states had the constitutional authority to determine their taxation frameworks. Despite these attempts to legitimize the policy, the underlying discontent remained.
The Chief Ministers Step In
It was the direct engagement between the two Chief Ministers that made the biggest difference. Sukhu initiated contact with Bhagwant Singh Mann, signalling that the situation demanded high-level attention. Punjab AAP leader Harpal Bains confirmed that the CMs had already discussed the matter and were moving toward resolution.
This wasn’t the first time the two had coordinated on inter-state friction. As a result of similar pressure from Mann and communication with Sukhu, Sukhu retracted its proposal about a hike for private vehicles in March 2026. On that occasion, Sukhu also reached out to Punjab Congress leaders Amrinder Singh Raja Warring and Partap Singh Bajwa to help defuse tensions. The pattern suggested both governments understood the value of quiet diplomacy on contentious border issues.
Nihang Sikhs & Political Fallout
Despite the Chief Ministers’ reassuring statements, the issue continued to dominate political discourse, particularly on social media. Opposition parties seized on it while the ruling Aam Aadmi Party remained notably quiet.
Barinder Dhillon, former president of Punjab Youth Congress, framed the “Khalsa Tax” not as the Himachal government alleged a conspiracy but as the inevitable result of prolonged government inaction. He warned that public frustration could push Punjab toward further unrest unless officials addressed core grievances. Dhillon noted that Punjab residents had been protesting the Himachal entry tax for over three months without meaningful government response.
Gaurav Rana of Punjab Sangharsh Morcha offered a different reading. Rather than viewing the symbolic action as a provocation, he saw it as a turning point. The visibility generated by the “Khalsa Tax” campaign, he argued, had finally jostled the Himachal government into acknowledging public concern, something months of quieter protests had failed to achieve. Rana also raised questions about the delayed rollout of a reciprocal tax model reportedly proposed by Punjab.
AAP MLA Dinesh Chadha from Ropar, who had previously opposed the entry tax in the state assembly and participated in demonstrations, reiterated his stance while expressing cautious hope for resolution.
What’s at stake?
The entry tax row is not just about revenue. It’s also about interstate relations, the mobility rights of the border communities, the interests of transporters and traders, and the ability of the government to respond to the grassroots grievances before they escalate. With the ultimatum of the Nihang Sikhs in place, both the governments are under increasing pressure to find a workable solution. The alternative is a continuing blockade on one of India’s lifelines for commerce and tourism that has ramifications neither of the states can afford to ignore.