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Car registration fee hike put on hold

A draft notification issued last month proposed to increase the registration charges for new internal combustion engine.

, ET Bureau|
Last Updated: Aug 21, 2019, 11.04 AM IST
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Agencies
Car registration
The draft notification issued on July 26, proposed to incentivise electric vehicles by exempting them from registration charges..
The government has decided to review the proposed increase in registration fee of petrol and diesel vehicles amid heavy lobbying from the auto sector that is facing its worst slowdown in nearly two decades.

A draft notification by the ministry of road transport and highways issued last month proposed to increase the registration charges for new internal combustion engine (ICE) cars to Rs 5,000 from Rs 600 at present. Renewal of registration of ICE cars is proposed at Rs 15,000.

Sources close to developments told ET that the government is not actively pushing for the new charges to be implemented immediately in view of the concerns expressed by the automobile industry in the country.

The move comes in the backdrop of automakers petitioning the government for a package to ameliorate its troubles. It has sought reduction in goods and services tax and other charges including registration that inflate the cost of a vehicle. Automakers had highlighted these issues at a meeting with finance minister Nirmala Sitharaman and she subsequently held discussions with the prime minister on the challenges faced by the economy at the current juncture.

Auto sales in July this year fell to a 20-year low, and at the current monthly average sales, total projected annual sales of passenger vehicles for 2019-20 may drop to yearly sales levels seen in 2014-15 and 2015-16.

In the first seven months of 2019, passenger vehicle sales dropped 13.2% to about 1.76 million units, according to data from the Society of Indian Automobile Manufacturers (SIAM).

The draft notification issued on July 26, proposed to incentivise electric vehicles by exempting them from registration charges. The manifold increase in charges for all segment of petrol and diesel-run vehicles was expected to encourage people to buy electric vehicles.

“We are still receiving comments from stakeholders on the draft notification-......We will take into account the concerns of the auto sector before notifying these charges,” said an official, adding that the government may consider revising them following strong criticism from the auto sector.
Car infograph

The transport ministry will take a final decision after the one-month period for stakeholders’ comments ends on August 26. “The charges are not likely to be finalised before two months’ time,” another official said adding that as long as the government doesn’t notify the new rates, the old ones will prevail.

The registration fee for petrol and diesel-run two wheelers is proposed to go up to Rs 1,000, 3-wheelers to Rs 5,000, LMV (commercial) to Rs 10,000 and medium and heavy goods or passenger vehicles to Rs 20,000 — an average hike of about 13 times with all categories put together.

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