[ghodlur]

A very valid issue raised by OP. Thanks a ton for the same.

Refund of Lifetime road tax paid is refundable by RTO's However this is governed by the state Motor vehicle taxation act. Attaching the taxation act excerpts from Maharashtra and Karnataka state MV acts. While Maharashtra MV act allows refund of road tax on vehicle transfer to other states and on totalled cars whereas Karnataka MV act allows only for transfer outside state. So anyone who wishes to claim the same, need to verify in the state MV tax act before they rush to the RTO.

See below the highlighted sections.

Maharashtra act

Notwithstanding anything contained in sub-section (1), where a tax has been paid under sub-section 4[(1C), (1D), (1E) or (1F)] of section 3, a registered owner shall be entitled to refund of tax at the rate specified in the Second Schedule, or as the case may be, Third Schedule in case of,—
(a) removal of motor vehicle to any other State on transfer of ownership or change of address; or
(b) suspension or cancellation of registration of motor vehicle on account of scrapping of it due to accident or any other reason :
Provided that, the refund of tax shall be granted by the Taxation Authority,—
(i) in case of removal of motor vehicle outside the State of Maharashtra on transfer of ownership or on change of address, only on production of sufficient proof of its transfer outside the State of Maharashtra; and
(ii) in the case of scrapping of motor vehicle only on production of a certificate from the insurance company or any other sufficient documentary evidence that it is beyond repair and cannot be used again.]

Karnataka MV act

The owner of a motor vehicle shall be eligible for refund of Life Time Tax paid, only when the vehicle is removed outside Karnataka state.

Once the vehicle in respect of which LTT is paid to Karnataka State, is removed outside the state, the registered owner shall get the vehicle registered in that State (New State). The concerned registering authority where the vehicle is registered, shall send an intimation (CRTI) regarding migration of the Motor Vehicle.

The Refund application has to made in form no 16 along with proof of migration .

On receipt of the intimation (CRTI) , Refund application will be considered.

Refund orders will be forwarded to the address noted in the application .

The general process is when the car is totalled and the Insurance co gives the certificate conforming the same and that the car cannot be repaired any further, an application needs to be submitted to the RTO (based on address jurisdiction) for cancelling the RC and applying for refund simultaneously. Most of the times since this is done by Insurance co on behalf of the owner, they rarely tend to push for the road tax refund. It is the owner's responsibility to ensure that the application for refund is made.

Only when the RC is cancelled can the Insurance co sell it as scrap.

[Manoj2268]

In the US, the owner can keep the wrecked car(written off though) and there was no compulsion that the scrap should be given back to the ins co. There were a lot of people stripping the car of usable items(including us) and the destroyed shell was disposed off at the wreckers for $$. Do we have the same option here?

[vinj14]

What about in Tamil Nadu? I lost my 45 day old creta during the chennai floods and got the full idv amount. The car was auctioned off to a mechanic who clearly intends to repair and sell. The insurance company asked me to provide the original rc to the buyer.
Any chance I can show that the car was declared a total loss and reclaim the road tax amount (appx 2 lakhs)?

[msk_kapoor]

Originally Posted by vinj14

What about in Tamil Nadu? I lost my 45 day old creta during the chennai floods and got the full idv amount. The car was auctioned off to a mechanic who clearly intends to repair and sell. The insurance company asked me to provide the original rc to the buyer.
Any chance I can show that the car was declared a total loss and reclaim the road tax amount (appx 2 lakhs)?

Since the car is going to be running, the road tax wont be returned. Once if the car is scrapped and out of road, then the road tax will be returned. Sorry my friend, i also lost my car and the tax in this flood

[audioholic]

Originally Posted by vinj14

What about in Tamil Nadu? I lost my 45 day old creta during the chennai floods and got the full idv amount. The car was auctioned off to a mechanic who clearly intends to repair and sell. The insurance company asked me to provide the original rc to the buyer.
Any chance I can show that the car was declared a total loss and reclaim the road tax amount (appx 2 lakhs)?

You should ideally demand the road tax amount from the mechanic or insurance company if they want your RC or you will get the road tax from the RTO and nullify the registration.

[ghodlur]

Originally Posted by vinj14

Any chance I can show that the car was declared a total loss and reclaim the road tax amount (appx 2 lakhs)?

Unless the Insurance co specifically mentions that the car is beyond repair, the application to RTO for road tax refund cannot be made. But this should not stop you from demanding the road tax paid from either the Insurance co or the mechanic to whom the car is being sold. Since the car is in a repairable condition and has a ready buyer, Insurance co wants to cash on the sale and reduce its liability.

I hope you have not surrendered the RC to the Insurance co upon the receipt of the IDV. If done already, then you can forget the road tax refund.

[ankit_chd]

Originally Posted by null

And what did you do with the road tax component? Did you ask for its refund?

No refund was given. They said "aisa nahi hota sir" It doesn't happen that way.

[the_dark_knight]

Hi friends,

I'm just thinking what happens to the tax (registration tax) when somebody's car gets stolen and he/she is paid the 90% (or close) of the ex-showroom amount from insurance claim. Lets not forget, registration tax these days contribute to significant amount to the On-Road price of the car.
Can we not claim tax credit for the car which got stolen ? Why should I bear the brunt for government not being able to protect it's citizen's assets. Why should one pay tax for 2 cars (running into lacs to government) for actually owning just one car.
I have seen cases where car got stolen in 2 (and in some cases 1) year of purchase. Why should the victims be asked to pay twice if their car/bike/scooter gets stolen. Surely, there should be some respite for them where they could pay far lesser tax (depending upon the age of the stolen vehicle) than they actually end up paying to get the replacement car.
Wanted to find out what would be the route if I want to raise this matter through RTI (for say Delhi RTO)?
Please share your thoughts.

Mods, please feels free to merge/move the thread if necessary.

Best regards,
TDK

[harishpr]

I differ on this point. Safeguarding car is owner's responsibility and not government responsibility. Road tax is primarily to maintain/build roads (it's different argument whether it's really utilised or not). Some of the insurance policies provide protection for road tax during total damage, but it comes at higher premium. Unfortunately, most car showroom persons don't explain all available insurance options, they are just busy pushing the default/basic policy to customers. I own a yeti and have total coverage (with 30% higher premium paid) from SBI. If my car gets stolen, I will claim everything from SBI.

[karthik008]

Originally Posted by the_dark_knight

Hi friends,

I'm just thinking what happens to the tax (registration tax) when somebody's car gets stolen and he/she is paid the 90% (or close) of the ex-showroom amount from insurance claim. Lets not forget, registration tax these days contribute to significant amount to the On-Road price of the car.
Can we not claim tax credit for the car which got stolen ? Why should I bear the brunt for government not being able to protect it's citizen's assets. Why should one pay tax for 2 cars (running into lacs to government) for actually owning just one car.
I have seen cases where car got stolen in 2 (and in some cases 1) year of purchase. Why should the victims be asked to pay twice if their car/bike/scooter gets stolen. Surely, there should be some respite for them where they could pay far lesser tax (depending upon the age of the stolen vehicle) than they actually end up paying to get the replacement car.
Wanted to find out what would be the route if I want to raise this matter through RTI (for say Delhi RTO)?
Please share your thoughts.

Mods, please feels free to merge/move the thread if necessary.

Best regards,
TDK

Your question may be debatable - only debatable - if you can prove that car is totally off the road, i.e., it's been stripped down into parts and sold off and will never see the road again. Even then, I doubt if the courts would allow such a claim. When you pay the tax, you pay for primarily using it in the state where it is registered and other states on a temporary basis. Ultimately, your tax money is being used to maintain roads and related systems and infrastructure. So the only argument, for the sake of a debate would be when you can prove that the car is never going to be on the road after being stolen. Even then, your money is still being utilised in the system somewhere.

As for the government protecting your assets, there is law for that, which is made by the government to protect its people. There is a presumption that acts like theft will happen in a society and the law specifies how such acts will be dealt with. Why blame the government for the car being stolen and not blame the society for having thieves in it?

Also, how do you prove that the car didn't get stolen because of the owner's negligence? And if the car owner is negligent, why should the govt have to give the tax back?

[cs_rajesh]

I differ with Harish. IMHO, Road taxes have to be periodic like annual ideally but in the guise of "convenience to consumer", governments demand lifetime (15 years) road tax. If Road tax payment is periodical, then the owner can stop paying road tax if he no longer drives the car around. By that principle, Road tax should be applicable to the extent the car uses the road. If the car is stolen and suppose the car is dismantled and parts are sold off then the car is no longer plying on your roads so reasonably tax demanded should be returned. Suppose the car is driven in some other state then the state is not eligible to demand road tax. Suppose the car is still plying in the state, the police has to find it, if there is a FIR registered on the stolen car.
I am not sure if car insurance covers the road tax portion, at least prorated, that is tax amount repaid to the extent of remaining years.

[the_dark_knight]

I think that's a very good point. And probably "not so hard to implement" to renew/pay your taxes every year just like one pays insurance premium annually.

Originally Posted by cs_rajesh

I defer with Harish. IMHO, Road taxes have to be periodic like annual ideally but in the guise of "convenience to consumer", governments demand lifetime (15 years) road tax. If Road tax payment is periodical, then the owner can stop paying road tax if he no longer drives the car around. By that principle, Road tax should be applicable to the extent the car uses the road. If the car is stolen and suppose the car is dismantled and parts are sold off then the car is no longer plying on your roads so reasonably tax demanded should be returned. Suppose the car is driven in some other state then the state is not eligible to demand road tax. Suppose the car is still plying in the state, the police has to find it, if there is a FIR registered on the stolen car.
I am not sure if car insurance covers the road tax portion, at least prorated, that is tax amount repaid to the extent of remaining years.

[apachelongbow]

Originally Posted by harishpr

I defer on this point. Safeguarding car is owner's responsibility and not government responsibility. Road tax is primarily to maintain/build roads (it's different argument whether it's really utilised or not). Some of the insurance policies provide protection for road tax during total damage, but it comes at higher premium. Unfortunately, most car showroom persons don't explain all available insurance options, they are just busy pushing the default/basic policy to customers. I own a yeti and have total coverage (with 30% higher premium paid) from SBI. If my car gets stolen, I will claim everything from SBI.

What about government's primary duty to provide safety, security, maintain law and order? which part of government duty is fulfilled when your car gets stolen?
The argument is correct in principle. If I pay lifetime tax (15 years) at one shot, then get my car stolen, I should get my remaining tax refunded, why is the government taking money for my non existent car?

[the_dark_knight]

Sorry buddy, but I beg to differ to your point as well. You saying protecting (safeguarding) car is not government's responsibility and all they have to fo is just provide us roads to drive cars. That's not true. It is the government's responsibility to look after people and property. I understand it is not an easy job and like with other things in life, there would be differing views but one can't argue government is responsible for safety of its people and assets.
Even if I buy your point, why should I pay twice to build/maintain roads when I am actually driving just one car ?

Originally Posted by harishpr

I defer on this point. Safeguarding car is owner's responsibility and not government responsibility. Road tax is primarily to maintain/build roads (it's different argument whether it's really utilised or not). Some of the insurance policies provide protection for road tax during total damage, but it comes at higher premium. Unfortunately, most car showroom persons don't explain all available insurance options, they are just busy pushing the default/basic policy to customers. I own a yeti and have total coverage (with 30% higher premium paid) from SBI. If my car gets stolen, I will claim everything from SBI.

[drsingh]

Governments exist to raise taxes. Period.

You could fight this battle in court. Legal minds may give better inputs about legality.

Do law students take up PIL 's during college? This sort of work is ideally done by slightly naive /idealist college students without any agenda other than policy reform

This point reminds of the PIL won by a lawyer in the Supreme Court regarding daily interest payment by banks to saving account holders instead of quarterly. Because the banks charge daily compound interest on most loans.

A legal mind with the motivation and time could influence policy change.