Govt. puts vehicle registration fee hike on hold amidst lobbying by auto sector

The government has put their draft for hiking the vehicle registration fee on the back burner after the auto sector’s push against it during sales turmoil.

By: | Published: August 21, 2019 10:48 AM

auto, auto sector, auto industry

The Indian government has currently put their plans on hold to hike the fees of petrol and diesel vehicle registration with the introduction of a scrapping scheme of old vehicles. In July 2019, the Ministry of Road Transport and Highways (MORTH) issued a draft notification proposing to increase the registration charges by RTOs for new internal combustion engine-powered cars from Rs 600 currently to Rs 5,000. The move was directed towards promoting electric vehicles in addition persuading owners to scrap older vehicles, in lieu of free registration of their new vehicle.

Currently, the government is not actively pursuing the matter after the auto industry lobbying against the proposed policy. Automotive sales in India is currently at its lowest in the last 20 years. The industry believes that increasing the registration fee for new vehicles will not help the industry at this difficult period.

The government’s decision to not actively implement the new hike in vehicle registration charges comes following the industry demanding a GST reduction in addition to other charges that are involved in vehicle registration which increase the cost of a vehicle.

The proposal issued by MORTH in July also stated that electric vehicles would be exempt from vehicle registration charges in order to promote electric vehicles. Additionally, the government also stated earlier that it will take additional measures in order to promote EVs in India. However, now the government’s push towards electric mobility as well will not be as aggressive as promised earlier. This is again down to the fact that the automotive sector is currently in turmoil with dwindling month-on-month sales.

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