Used vehicle platforms fear new rules could puncture business

Platforms promoting second-hand autos have flagged sure provisions of the amendments to the central motorized vehicle guidelines that might probably influence companies of bigger platforms.

The amendments had been notified in December to convey used-vehicle sellers underneath the regulatory ambit. The draft guidelines for used-vehicle sellers had been initially issued in September final 12 months following which stakeholders had submitted their views to the ministry, a supply stated including that a number of the issues raised now had been flagged earlier as nicely.

The guidelines, which might cowl enterprise funded corporations akin to Spinny, Cars24, CarDekho, OLX Cars, amongst others , grow to be relevant from April 1.

In a submission to the ministry of highway transport and highways (MoRTH), IndiaTech, a foyer group representing tech corporations, raised issues over obligatory registration of second-hand automobile sellers by displaying GST registration.

“There are several used car dealers in India whose turnover is much below the prescribed threshold limit required under the GST laws, and hence will not have a GST registration,” IndiaTech wrote in its submission.

Speaking to ET, Cars24 normal counsel Kamal Ok Avutapalli stated that 70-80% of the smaller sellers fall under the cut-off for having a GST registration. “If the smaller dealers don’t get registration, we won’t be able to sell it to them. So, not only do these dealers get impacted, but me as a platform also gets impacted because my liquidity of valid dealers is going to get lost,” Avutapalli stated.

IndiaTech urged that because the GST Act has prescribed threshold limits for registration functions, the appliance kind for grant or renewal of authorisation certificates on the market of registered autos ought to present an possibility for sellers to both enter their GST registration quantity or declare that they’re exempt from GST as per the GST legal guidelines. “An alternative authentication process may be considered here involving either PAN or a mandatory bank account,” it added.In one other main concern over the problem, business stakeholders have flagged the implementation of the brand new guidelines. “We have been speaking to some local RTOs (regional transport offices), and at the state level, there is no understanding yet as to how these new guidelines will be applicable. This has been true for RTOs in Delhi, Madhya Pradesh, Andhra Pradesh & Telangana, at least,” a prime government at a used-car gross sales unicorn informed ET.

“The rule on having large dealers registered is also cumbersome given that there is no clarity on whether those with nationwide presence have to register themselves with local transport departments or if there will be one common registration,” the chief stated, including that stakeholders have sought clarifications from the federal government on these points.

Further, the brand new guidelines have launched the idea of deemed possession, whereby the authorised vendor can be thought-about a deemed proprietor of the automobile after submission of a kind after taking the automobile from the unique proprietor.

This places the legal responsibility of the automobile together with any incidents that occur upon the deemed proprietor. Industry has flagged that the principles don’t contemplate the state of affairs of a vendor promoting the automobile to a different vendor—a mannequin that’s deployed by auto-tech unicorns.

“In the absence of such a likely scenario, the first dealer who had purchased the vehicle will continue to remain as ‘deemed owner’ despite the vehicle being sold and handed over to another dealer under a B2B transaction,” IndiaTech wrote in its submissions.

Additionally, automotive sellers can solely take automobiles out of their warehouse or parking yard for particular functions, and each such journey must be notified to the authorities by means of a kind that’s stuffed on the federal government’s on-line portal.

“Dealers like Cars24 who have pan India operations have inventory of thousands of cars. Manually feeding the trip details on the portal will be a time consuming exercise. We have requested MoRTH to provide API integration so that trip details of large dealers can be done on a batch-upload or real-time basis,” Avutapalli stated, including that business stakeholders have sought time with highway ministry officers to debate these points and search clarifications.

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