[febin8055]

Originally Posted by abhishek_hch

The formula in Circular is

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

What is the “1.25” mentioned in the formula meant for?

[AnnaRocks]

Originally Posted by logicalidiot

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.

September 15 as per this article in The Hindu.

[itwasntme]

Originally Posted by febin8055

What is the “1.25” mentioned in the formula meant for?

It is the 'premium' charged under this scheme. Even if you factor in the 25% extra, the significantly lower upfront RTO tax + the balance spread over ~7 years is still a huge saving in usurious states like KA.

[84.monsoon]

If it is indeed true that the BH tax scheme can be opted for new car purchases it does mark one of the largest changes since the GST regime in vehicle price/affordability etc. I still doubt this will go through, knowing how big a hue and cry non-BJP ruled states will raise, as it seriously compromises their revenues. For example, there is no way TN Finance minister Palanivel Thiagarajan is going to take this lying down, he has actually been talking of raising road tax percentage higher to improve state revenues. I expect the states will go to the supreme court over this, if it is really true, to obtain a stay from the central government unilaterally making such a move. As a large percentage of buyers can claim their employers have offices in more than one state (think about IT industry giants like TCS, Infosys etc. and the number of employees of these companies who buy cars, who could all technically qualify for this). The timing of the move actually looks dubious, when a state like TN is re-asserting itself politically and financially, and trying to bring in better control of its revenues and fiscal deficit. One of the moves they are actually considering is to raise peak road tax%.

https://www.businessinsider.in/busin...w/85322536.cms

Some rough calculation of gains/loss from opting for this scheme - these show the impact on buying a car that costs 50 lakhs ex-showroom. The first row is for a state that has 10% peak Road Tax Rate, the second is for state like TN which has 15% peak Road Tax rate and the last is for a state like KA with a 18% peak Road Tax rate. The savings do not even consider time value of money - if the future BH tax payments are discounted to present value, there will be an even larger saving in states with higher peak road tax rates.

[Kelvinator]

Finally the Central Govt has decided to implement this. I wonder when will this facility be open to all. One of the most important thing other than hassle free movement is that the vehicles will also have the year of first registration mentioned on the number plate now. It will be very easy for police to figure out if the vehicle is say older than 10 or 15 years and can easily be challaned or can be caught in camera.

[anshumandun]

This is an old scheme with a new name.

When we bought Toyota Etios Liva in 2011, we paid road tax in Karnataka just for 2 years since the car was registered in my wife's name who works for BHEL. But then the rules changed 2-3 years after that and we had to pay the full balance life-time road tax at one go.

Looks like the same scheme is being brought back under the BH name plate.

[matizcrazy]

For a car costing 9.99 L , the tax is 8 %.
How much do we pay at the time of regn, at the beginning of third, fifth, seventh years ?
Can anyone explain please?

[sramanat]

A far simpler approach would be to have road tax levied on an annual basis (like in the US where the registration expires on your birthday) and the owner owning the registration plates. This would reduce the up-front cost of a car (life time tax is around 10-20% of the car's price) and the registration can be renewed either on your birthday or when you renew insurance.
The initial teething time of 2 sets of registration plates (life time vs. annual) will be confusing for everyone, but not something that can't be solved using technological means (bar code reader, number plate recognizing software etc.).
If you move your car to a different state, just renew the annual tax there.
Not to mention the amount of efficiency this will bring to the used car market. Today a car's market is limited to the state where it is registered and there are many used car markets which are inflated beyond belief (like Bangalore). Local price variations will be smoothed over and one can truly sell/buy a car online.

[AnnaRocks]

Originally Posted by matizcrazy

For a car costing 9.99 L , the tax is 8 %.
How much do we pay at the time of regn, at the beginning of third, fifth, seventh years ?
Can anyone explain please?

This is how it should be. Kindly correct me if anyone else differs . Probably one could set the numbers of years upfront too. For example if one intends to keep it for 10 years, they could pay that upfront during registration I believe . That should come into play during resale if they sell with tax paid years left on paper.

[sramdev9]

Indeed a great step by the government!! I hope the government gives an option to existing vehicle owners to opt for BH series registration as well!

[logicalidiot]

Originally Posted by AnnaRocks

This is how it should be. Kindly correct me if anyone else differs .

There is also a 1.25x premium over the regular motor tax. If you've assumed to have that included in the tax mentioned above, then I think this looks good and correct. Kind of lucrative as well if one's considering to buy a luxury vehicle.

If this seems true, I have a feeling that this system is going to be abused bad. Too many loopholes at the moment.

[AnnaRocks]

Originally Posted by logicalidiot

There is also a 1.25x premium over the regular motor tax. If you've assumed to have that included in the tax mentioned above, then I think this looks good and correct. Kind of lucrative as well if one's considering to buy a luxury vehicle.

If this seems true, I have a feeling that this system is going to be abused bad. Too many loopholes at the moment.

Yes pal, you are correct. If we consider this 1.25 x premium calculation, then the first time tax would be Rs.13200 instead of Rs.11417 for the case in question. And if we consider that they evenly spread out the remaining part of the 8%, the subsequent taxes for every two years should be Rs.11000 instead of 11417.

Anyway, let us wait and watch. Kind of difficult for me to believe that govt will do something like this to ease the burden of the citizens, particularly the middle class who are the favorites squeezers for any govt in any part of the world . They are going to benefit the most from this.This new uniform and kind of revolutionary tax design is not impossible, but we have been conditioned over the years to accept a lot of atrocious taxes as normal. I am waiting for that "Hey look, we forgot to mention this one clause the other day" response now from the authorities.

[abhishek_hch]

Originally Posted by 84.monsoon

I expect states will vehemently oppose this.

I was also expecting this but have not heard any statement from any state minister on this. Perhaps they realise that it's futile - roads being under concurrent list, the state laws have to be under ambit of central laws or get Presidential approval. Even the power to collect Road Tax after 11 months flows from the MV Act 1989, which incidentally was pretty short sighted.

With a vast majority of car owning junta hopping jobs frequently, this had become a great headache. State governments were using this as a plain harassment tool to harass people for no fault of theirs.

Add to it that the Road Tax in many states of India is simply a loot. It's a captive audience being milked as much as possible. In a state like Karnataka, the road tax is Rs. 3 lacs for a Rs. 15 lac car. Assuming the owner runs the car for 75,000 KMs - that's a whopping 4 Rs. per KM, almost 3 times the toll tax one pays per KM on four lane highways. Good that the bluff is being called!

[pk1972]

Originally Posted by docted

The GOI attempts to make personal vehicle owner with transferable job breath a sigh of relief with new series of registration under BH series.
These person eg. Defence, PSU, or any organization having offices in four or more UT can volunteer to have their vehicle registered under BH series, to prevent mandatory registration in new state after 12 months.
The road tax would also be billed in two year slots insted of 15 yrs.
Guess Mr Gadkari and co. Do really have their ear to the ground

https://timesofindia.indiatimes.com/...w/85700635.cms

Long due reforms. My firm has offices more than 4 locations. Any guidance on how do I go about applying for BH registration?

[amvj]

Before everyone jumping in joy, Isn’t this is applicable only those who are in Govt or in private if they have offices in more than 4 locations?