In August 2021, the Ministry of Road, Transport and Highways (MoRTH) introduced the Bharat (BH) series numberplate, simplifying vehicle registration and eliminating the need for new plates when relocating. This initiative alleviates the burden of paying new State road taxes, obtaining NOCs, and seeking refunds for frequent relocations, greatly benefiting vehicle owners nationwide.
Central government employees, bankers and private sector/MNC workers with offices in four or more States/Union Territories (UTs) have been the primary beneficiaries of this initiative. Choosing the BH series is financially wise for most eligible individuals due to its lower road tax rates (6-14 per cent) compared to many States. The tax calculation is based on the vehicle’s invoice value (price before GST and cess), making it a cost-effective choice. Additionally, BH series requires payment of road tax for two years upfront, reducing initial costs for consumers.
Despite its advantages, the BH series has not seen widespread adoption. In the first 15 months after the notification, MoRTH recorded 49,696 BH series vehicle registrations nationwide, with Maharashtra leading at 13,625. However, this accounts for just over 1 per cent of total 2022 motor vehicle sales in India.
Road tax is a major source of revenue for States, with rates as high as 21 per cent for cars above a certain price range. With the launch of BH registration, States are concerned about road tax revenues.
States’ resistance
Southern States initially resisted BH series adoption, fearing a 5-7 per cent revenue decrease. Over 10 States and Union Territories are yet to implement BH series, leading eligible buyers to seek these vehicles from neighboring States.
Another challenge is the lack of awareness among dealers and consumers about BH series nuances. Car dealers have on occasion miscalculated road tax, charging it on the ex-showroom price, resulting in overcollection of road tax from consumers.
BH series car owners also grapple with the biennial road tax collection system, which mandates repetitive document submissions every two years.
Additionally, selling a BH-registered car to individuals not eligible for the BH series incurs pro-rata State road tax payments, affecting resale potential and pricing due to increased compliance demands. This challenge, although expected to ease with growing BH series awareness and demand, remains a significant obstacle, especially in its early stages.
Raining awreness
MoRTH should continue to lead the charge in raising awareness to encourage the BH series’ widespread adoption. National-level implementation requires collaboration between the Centre and States to minimise revenue loss. MoRTH’s recent decision to allow vehicles with state registration to obtain BH number plates is a significant step in boosting BH adoption.
Expanding eligibility criteria to include digital nomads and individuals relocating for valid health, educational, or family reasons is vital. Immediate actions should involve issuing clear notifications to car dealers, providing comprehensive BH series application guidelines, and extending the validity of road tax payments and eligibility proof beyond the current two-year limit.
The writer is a public policy professional and a laywer