Punjab government intensifies recovery of possession tax from defaulting motor vehicle dealers

Chandigarh (The Uttam Hindu): The Punjab Government has taken decisive measure to recover Rs.7.85 crore in possession tax arrears from defaulting motor vehicle dealers operating in the state. Divulging this, Transport Minister S. Laljit Singh Bhullar said that persistent audit objections and overdue recoveries have necessitated immediate intervention by the Transport Department to uphold compliance and accountability.

"To ensure adherence to Rule-40 of the Central Motor Vehicle Rules (CMVR) 1989 and as part of the recovery drive, the department has temporarily deactivated the User IDs of defaulting dealers on the VAHAN portal", said the Cabinet Minister, adding that this drive follows a similar initiative in 2022 when defaulting dealers were issued notices, with some dealers facing suspension. Subsequently, in 2023, notices were issued again, but despite assurances from dealers to submit mandatory documents and clear outstanding taxes, many failed to honour these commitments.

The Transport Department is actively working on necessary measures to improve the Motor Vehicle Dealership registration process, he added.

Meanwhile, State Transport Commissioner Mr. Jaspreet Singh informed that the Federation of Automobile Dealers Associations (FADA) has submitted a formal request to the Office of the State Transport Commissioner, Punjab, highlighting concerns over the operation of numerous sub-dealers in the market, which adversely impacts their business. Acting on this request, the department conducted an inquiry, resulting in the suspension of several defaulting dealers identified during the investigation. In addition, FADA has proposed implementing a “One GST, One VAHAN” policy to streamline the creation of Motor Vehicle Dealership User IDs on the VAHAN portal.

He said that FADA has further recommended mapping the sale and movement of used cars in the broker market under the Ministry of Road Transport and Highways (MoRTH) notification G.S.R. 901(E). In response, the department has initiated steps to bring second-hand motor vehicle dealerships under the purview of the law, ensuring greater regulation and transparency in this sector.

He said that the during the Public Accounts Committee meeting held on 27 November, 2024, the department was directed to recover all outstanding tax dues up to the financial year 2023-24 and submit a compliance report to the committee within one month. He said that disciplinary action will be taken against the concerned RTOs/RTAs in case of non-compliance.

Notably, as a result of these rigorous efforts, the transport department has successfully recovered ₹4.15 crore from the amount identified by the audit. Additionally, Rs.13.07 crore has been recovered for the period starting from 2017-18 onwards. Dealers who have fulfilled their obligations, including submitting all mandatory documentation and clearing pending dues, have been reinstated and are now permitted to resume vehicle sales through the VAHAN portal.

The State Transport Commissioner urged dealers to promptly comply with all statutory requirements and cooperate fully with the department to avoid any disruption in operations.