Owners of cars or other vehicles relocating from one State to another will be spared the tedium of re-registering their vehicles and changing the vehicle number plates, if a planned move of the Road Ministry takes off. The proposed policy is still in the idea stage and was discussed at the Group of Transport Ministers meeting a few months ago, according to an official.

To get around this, the Road Transport Ministry had written to all the State governments with a suggestion to introduce a common tax regime across States based on the price of cars. Currently, car buyers tend to flock to States that offer lower tax rates, which make for cheaper cars. If implemented, this will enable number portability of vehicles across regions.

Another line of thought in the government is to allow seamless transfer of relatively older vehicles – those that have completed a few years. This means relatively older vehicles will not require a re-registration and related paperwork when used in a different State. This would, to some extent, separate the genuine buyers from those looking to “manage addresses” in their hunt for a cheaper vehicle.

Regulatory requirement

At present, if anyone shifts to another city with a personal vehicle, the owner is required to re-register the vehicle; this involves getting a no-objection certificate from the Regional Transport Office (RTO) where the vehicle was originally registered, repaying tax in the newer place, and getting a new vehicle number. Each State and region maintain their own vehicle numbers and related database. For instance, Delhi numbers start with DL, Haryana with HR, Tamil Nadu with TN, Maharashtra with MH and so on.

The hassle in transferring a vehicle across States prompts many to sell their vehicle in the second-hand market even if they are in reasonably good -condition. Some users simply shift along with the vehicle without doing the requisite paperwork, and use the vehicle in the destination State, but they risk penalties imposed by the traffic police.

This regulatory requirement – of making people change their vehicle registration when there is a change in address — exists as different States have different tax structures for vehicles. The idea is to discourage people from buying vehicles from those States where the taxes are lower, making the vehicle cheaper.

“With the implementation of the Goods and Services Tax, which is a consumption-based tax, we proposed that there be an 8 per cent tax on vehicles costing below ₹10 lakh, 10 per cent tax for vehicles that cost ₹10-20 lakh, and 12 per cent tax for those that cost over ₹20 lakh, across the country. And the address verification process could be made more stringent,” explained the official. The issue was taken up by Group of Transport Ministers formed to look into issues related to bringing in reforms to provide easier services to people.