[LivingCars]

Hi,
Thanks for updating on the official notification. It is indeed a great step forward for the people who are on a transferrable job and hence on the move from one state to another. But, would request further inputs on the following points from the forum:

1. When is the new BH series becoming effective i.e. From which date? I read somewhere that it is 15th September 21.
2. Regarding the old system of claiming pro rata refund from the parent state - Does anyone have a prior experience of successfully claiming the refund.
3. Is the pro rate payment in new state only on paper or is being actually followed - I am planning to move my Honda City (2015, VX Model) from Odisha to West Bengal. Inputs would be really helpful.
4. Given that we pay only for 2 years in the BH series i expect the on road price to decrease at the time of buying of new vehicle. But how does it compare with one time tax over the lifetime of the vehicle?
5. Will BH positively impact the resale value of vehicle due to the inbuilt flexibility in moving the vehicle from one state to another.

Thanks in advance for valuable inputs which we always expect to receive in this forum.

[abhishek_hch]

The tax rates under this proposal are -
- 8% for cars upto 10 lacs
- 10% for cars upto 20 lacs
-12% for cars > 20 lacs

All these thresholds are defined in price excluding GST. The tax calculation will also be done using price excluding GST. Almost all states, barring a few like Jharkhand, take the GST into account while calculating Road Tax.

The formula in Circular is

Slab tax on Car Value (excluding GST)*1.25*2/15.

This upfront payment at time of purchase comes out to a total of 0.12% of Total Invoice Value of a car. Currently, states like Karnataka charge 17% upfront!

This is actually quite a revolutionary! Back of the envelope calculations show that for a Rs 17.5 lakhs car, you need to pay Rs. 3.35 lakhs as Road tax to get it out of the showroom in Bangalore. Under this regime it will be only Rs. 20,000 - a whopping 3 lac reduction in on road price of the vehicle. It will require a bi-annual payment of Rs. 20,000 which most people would be able to afford easily. Effectively you can walk out of the showroom with a Rs. 17 lac ex-showroom car by paying as much you do today for a Rs. 14 lac ex-showroom car.

I expect states to show resistance in granting BH series numbers. If it's easy to get, then the market dynamics especially w.r.t. variant distribution are going to change drastically.

[mygodbole]

Classic case of too many words muddling up the issue. My understanding is: Old car or new, BH plates will pay relevant state road tax for only TWO years at a time; subsequent road tax to be levied at two year intervals. No state shall lose out on revenue if a vehicle uses roads in that state, which has been the bone of contention all along. The notification has inserted the present rules of re-registration, making it confusing.

[Chetan_Rao]

The interesting bit, after this eventually become available to everyone, is what it'll do to the used car market.

Today, most people don't bother with out-of-state cars due to the hassle and expense of re-registration. A simplified model would essentially open up options nationwide, and some epic road-trips to bring cars home.

[vharihar]

The catch will be (and one that is likely to be exploited the most, unfortunately): How to check and enforce that owners are renewing their registration every 2 years?

In the US, they have a colour coded decal system so that cops can detect violations from 20 meters away. I wonder if the BH proposal has a provision for this. Though our junta will likely put fake decal stickers. So something more bulletproof is needed.

Or is the year part going to change upon every renewal? That's a good idea, that could be made to work. Though HSRP manufacturing plants are going to be busy manufacturing like hell!

[girishv]

Originally Posted by mygodbole

Classic case of too many words muddling up the issue. My understanding is: Old car or new, BH plates will pay relevant state road tax for only TWO years at a time; subsequent road tax to be levied at two year intervals. No state shall lose out on revenue if a vehicle uses roads in that state, which has been the bone of contention all along. The notification has inserted the present rules of re-registration, making it confusing.

Even if so, there are multiple benefits.

1. The buyer will be paying substantially lesser amount upfront
2. The total registration charge is substantially less in Karnataka for example,
a. It is calculated at 10% for car costing less than 20 l instead of 17%
b. The charges are calculated excluding GST, that is another 2.8% less

I am not considering the interest saved on the money saved upfront. For a 15 L ex-showroom car in Karnataka, we can save anywhere around 1 lakh at the end of 15 years.

MX at 11.99 lakh ex showroom

KA registration: 11.99*1.17 = 14.02 L + insurance
BH registration: 11.99+(9.37*0.1*2/15) = 12.11 L + insurance

EMI for 5 years assuming 2 L upfront payment and 8% interest:
KA reg : 24,331.00
BH reg: 20,500.00

AX3 at 13.99 L

KA registration: 13.99*1.17 = 16.37 L + insurance
BH registration: 13.99+(10.93*0.1*2/15) = 14.14 L

EMI for 5 years assuming 2 L upfront payment and 8% interest:
KA Reg: 29,137.00
BH Reg: 24,615.00

So with a little more EMI, I can get AX3 in place of MX. Isn't it good?

[padmrajravi]

It looks like a good plan to remove all the hassles for the inter-state transfers. In the case of private company employees, why restrict it to ones with offices in 4 states? Shouldn't it be companies with presence in two states?

[xavierk]

I am in the process of finalising a BMW 330i mSport in Bangalore and I did some rough math

Considering the fact that this has a 12% vs 18% road tax in bangalore for the car. the saving is about 2.5L

More importantly I pay only the first 2 years tax ie. my inroad price comes down by almost 7.5L
which means I take that much less loan (Assuming the downpayment is kept the same) and you save the 7.5% interest on the 7.5L which is an interest saving of almost 2L.

if you look at it from the perspective of what the car will cost at the end of the 5th Year (when you sell it) it's a substantial price break from the old system. The question is what happens to resale price

It is likely to be BH registered cars will command a lower price than KA registered cars, the situation may be the reverse in a place like Delhi but in Delhi DL road tax is also less than the 12% in this system.

Does anyone know when is the earliest someone can register using the new "BH" registration?

[NowNew7]

Originally Posted by embee

The vehicle registration facility under “Bharat series (BH-series)” will be available on voluntary basis to defense personnel, employees of central government, state government, central and state public sector undertakings and private sector companies and organisations, which have their offices in four or more states or Union Territories.

This is my area of concern... Who would be the approving authority for eligibility? The better way would be keep this open, so that the kind of skullduggery that goes nowadays with other-state or other-owner registered cars stops making sense.

Originally Posted by padmrajravi

It looks like a good plan to remove all the hassles for the inter-state transfers. In the case of private company employees, why restrict it to ones with offices in 4 states? Shouldn't it be companies with presence in two states?

Totally agree with 2 states or more as the criteria. A good examples may be IT companies which are there in any 2 city pairs in Bangalore, Hyderabad, Pune, Chennai, Noida, Gurgaon etc. The hassle does not reduce if it's any of the other states.

I sincerely hope this is the first step/pilot to test out a uniform tax regime across the country, and we would see the next phase standardizing the rates and doing away with the dependency on the BH series for inter state portability.

[AnnaRocks]

This is going to be a boon for the vehicle owners, especially for the Southern states where the tax is on the higher and atrocious side. This multiples of 2 year tax payment clause is the icing on the cake. Appears to be a revolutionary step, at least on paper. Just hoping that the state governments do not come up with innovative ways to mess this up to continue getting those current high amounts of taxes or the centre making a U-turn soon under pressure saying 'Hey look , we forgot to mention this thing the other day..."

[FamilyTraveller]

I read multiple news article on this but none has specified what documents are required from people from private sector who are eligible for this.

My guess is that the RTOs like KA RTO who stand to lose out due this will definitely make it cumbersome for people to get BH plates!

[84.monsoon]

Re-reading and researching this a bit more, it looks like this scheme will only apply to re-registrations, at the first point of such re-registration. Note the way it is positioned, it is a way to reduce hassles during transfer to another state. And NOT a way to reduce upfront purchase price of cars.

So if I buy a car in KA for 20 lakhs, I will still have to pay the 18% road tax at the time of purchase, the BH option is not available at that point. Now, if I get transferred or take a new job and have to move to TN, instead of the current painful practice of obtaining NOC from KA, re-register paying a substantial amount in TN and then claim refund from KA , I can opt to go for a BH registration. On subsequent transfers to other states, I do not have to bother about vehicle registration at all, since I now have BH plates.

This way, states will still earn the full road tax revenues on new vehicle purchases. The only revenue loss for states is the revenue from re-registrations, which I think will not be a big percentage of the overall pot, as not many people actually re-register vehicles. The state may also get compensated for this small loss by the center, through getting a share of the BH revenues.

If this is true, there should not be a major challenge for implementation from the state's side. It will actually improve compliance to registration rules for out of state vehicles.

[AnnaRocks]

Originally Posted by 84.monsoon

Re-reading and researching this a bit more, it looks like this scheme will only apply to re-registrations, at the first point of such re-registration.

So if I buy a car in KA for 20 lakhs, I will still have to pay the 18% road tax at the time of purchase, the BH option is not available at that point.

Which point you read or saw made you think so ? Because if what you said here is correct, then where do the tax slabs mentioned come into play?(Under 10 lakhs 8 %, 10-20 lakhs - 10%...)

[logicalidiot]

Originally Posted by 84.monsoon

Re-reading and researching this a bit more, it looks like this scheme will only apply to re-registrations, at the first point of such re-registration. Note the way it is positioned, it is a way to reduce hassles during transfer to another state. And NOT a way to reduce upfront purchase price of cars.

I'm not sure where you've got this info because I haven't read it anywhere stating it would apply only for re-registrations. Would like to know the reason why you say so!

Secondly, this whole things looks a little bleak at the moment with a lot of questions. Anyone has an idea on when this will be actually implemented? I understand this news was around since some time now and again resurfaced with small changes in the policy and registration series change from "IN" to "BH". There has been no info on when the public can expect this.

[dust-n-bones]

Originally Posted by vharihar

The catch will be (and one that is likely to be exploited the most, unfortunately): How to check and enforce that owners are renewing their registration every 2 years?

Since this is going to be a 100% online system, can the RTO not just send online reminders and eventually challans for offenders?

If an offender does not comply even then, there of course are cameras everywhere these days, which can eventually flag registration plates.

Originally Posted by logicalidiot

There has been no info on when the public can expect this.

The new rules notified by the ministry of road transport and highways on August 26 will come into effect in the country from September 15.



Link

Given this is for new registrations only, I assume the immediate beneficiaries will be new car buyers in southern states who qualify. And gradually the used car market.

Is some arbitrage built into this system though? An eligible citizen buys a BH vehicle, and sells at a profit to a non-eligible citizen? :-)

Mods: As a newbie, am unable to find an option to merge 2 posts. Kindly help.