Proposed BH number plates-potential problems

I had written earlier how cumbersome it is to get a vehicle re-registered in another state and how the whole process is pointless. If you own a TN registered vehicle and you shift to Karnataka because you got transferred or better job or some other personal reasons you've to go back to TN, get NOC for your vehicle, pay life time tax again and get it registered in Karnataka, ask for refund of life tax in TN, wait for new number from Karnataka, make multiple physical visits to RTO for inspection etc, get new number plate installed and so on- a complicated process that takes 2-3 weeks of effort and several thousands in expenses.

Now someone in central government have thought about it. Their proposed solution, instead of simplifying the process, is to introduce a new number format, the BH (earlier thought to be IN) number plates. I feel it is not the right approach. The new IN number plate is bound to create more problems.

Below is what Govt is thinking:

• BH Number plate eligibility will be rolled out only to select group such as army personnel, central govt, PSU employees, employees of corporates operating in more than 5 states etc
• IN number plate holders pay road tax only for 2 years (instead of life tax paid by everyone else)
• Owners have to renew after 2 years.

But this scheme seems highly problematic. Below are the issues that need to be addressed

#1 Vehicle registration is state subject. Life time tax is very low in some states (like Delhi) and very high in some other states like Karnataka. I paid about 15.3% lifetime tax in Karnataka for Venue S+. People in UP, Delhi pay much less. Not clear what reference central govt will keep to decide tax % for BH vehicles. If BH number plate format significantly reduces tax payable, many will opt for it, causing major loss for state governments. In term state police may start harassing BH vehicle owners more.

#2 No one can predict what will happen 2-3 years from now. 

Today I may be a private sector employee, tomorrow I may join PSU. So I will still face issue on my vehicle re-registration. No one knows what will happen 3-4 years from now- will they get transferred, will they get better job in other state, will there be some calamity forcing migration etc. So how will an individual predict he may have a need to relocate few years from now.

If I am a PSU employee do I have to mandatorily opt for IN registration or can I chose between state registration and IN? 

#3 Possible misuse:

Vehicles are sold often, vehicles are used by other family members. If only select group of people (like PSU employees) are declared eligible for BH number, can their family members use it? What happens if the vehicle is sold- new buyer has to pay life time tax again or only delta?

#4 Why only select group of people eligible?

A private sector employee also may get transferred or might find better job in another state. For personal reason one may have to operate from a different state for a few years. Why only select group of citizens eligible for this scheme? May be central govt will do some pilot with employees of above organizations and eventually roll out to everyone- but if everyone pays tax for only 2 years, states will cry of lost revenue.

#5 How to track renewals?

So many people don't renew their insurance. Who will track if vehicle owners renew after 2 years? Would central govt form different department, staff to manage all these or existing local RTOs are responsible for tracking it?

#6 Tracking: Several toll exemptions are based on registration number (KA 19 vehicles are exempted from toll near Mangaluru). By looking at Number plate everyone can identify if it is a local vehicle or outstation vehicle. This will he hard in future.

#7 Tax will keep increasing every year. Vehicle life time tax is now at 15.5% for vehicles up to 10 lakhs in Karnataka. Was lot less earlier. With once in two year taxation, there is high possibility that every 2 years road tax will increase and vehicle owner will have to keep paying more for each renewal. At present if I pay life tax one time during purchase I am not affected by future tax increase. LPG price has doubled in 7 years, petrol is getting expensive, central govt's IN vehicle tax also will keep increasing.

#8 Purchase price partiality: A 10 lakh car will be available for a PSU Employee for only 9 lakhs because while normal customer pays 1.3 lakh as life time tax, PSU employee might pay only 30k. This will create anger among ineligible people. Also people will buy car in the names of some family member or relative eligible for BH number.

At times it may be a good idea to pay tax only for 2 years. Within few years you may sell off your vehicle or it may face an accident and become total loss. Many scenarios like this tax paid for 15 years goes waste. 

While intention seems to be good (eliminate re-registration hassle while vehicle owners move across states), the implementation of IN number plate scheme will be pathetic similar to all other implementations-demonetization, GST etc- rolled out without proper due diligence and causing more confusion and problem with ever changing set of rules.

A simpler process change could be as below, when vehicle owner is moving states

- A simple online request process, after which both states coordinate and facilitate re-registration. 

- Without personal visit, check if there're any pending dues and if not issue NOC. 

- Skip having to pay tax again, let two states auto transfer the difference among themselves.

May be I am wrong- may be whoever implementing this idea have a solution for everything. Let us see. Do share your thoughts.

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