Government to increase registration charges on cars & two wheelers by 25 times!

Get ready to pay a lot more while registering your petrol/diesel engined car or motorcycle in the coming months as the Indian government has proposed a steep increase in registration and re-registration charges for all categories of vehicles that use internal combustion (IC) engines. Internal combustion engines refer to engines that run on petrol/diesel/CNG/LPG, and cover nearly all vehicles sold in India. This massive hike in registration charges do not apply to electric vehicles, which also have road tax exempted. This move from the government is meant to make electric vehicles more popular and discourage the used of petrol and diesel powered vehicles.

Registration Charges Hike

Coming to the exact quantum of increase in registration charges, the Indian government has proposed that two wheeler pay Rs. 1,000 as registration charges for new vehicles, up from the current Rs. 50. This represents a 20 fold increase. As for cars, new vehicles would need to pay Rs. 5,000 as registration charges, up from the current Rs. 500. This is 12 times more than current prices for registration. The story doesn’t end here.

Even re-registering vehicles (while buying used cars and two wheelers) will see a steep increase in registration charges. The government wants to charge two wheelers Rs. 2,000 for re-registering, which is 40 times more than the current rate of Rs. 50. As for cars, re-registration charges are proposed to be hiked to Rs. 15,000, and this represents a 25 times increase in charges from the current Rs. 600. Used cars and two wheelers will get expensive by Rs. 15,000 and Rs. 2,000 respectively as there’s no way that buyers can escape these charges.

When will the new registration charges come into effect?

Within the next 30-45 days, according to an unnamed government official, who had the following to say to this question posed by the TimesofIndia,

We have sought feedback from all stakeholders before notifying the final fee structure in the next 40-45 days. The proposal of steep increase in the renewal fee for commercial vehicles, particularly trucks, buses and other heavy vehicles by nearly 27 times is aimed at making people opt for scrapping them once they are over 15-years old.

This development from the government comes at a time when the car industry is reeling under a severe sales slowdown. Unsold cars and two wheelers across dealerships worth over 60,000 crores is putting severe pressure on dealers, automakers and auto component manufacturers. Many dealers have shut shop leading to job losses. As for auto component makers, the industry has warned that nearly 10 lakh jobs would be lost if demand does not pick up. Car makers for their part are going slow on production and new launches.