Cars24, Spinny, Olx Auto, Mahindra First Choice write to MoRTH for changes in new registration portal

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Used car dealers, including prominent online players, such as Cars24, Spinny, Olx Auto, and Mahindra First Choice wrote to the Ministry of Road Transport and Highways (MoRTH) highlighting glitches found in the newly-launched registration portal and reviewing certain guidelines implemented last year, multiple sources aware of the matter told Moneycontrol.

These submissions happened over the past two weeks, following the portal that is meant to register used car dealers to get authorisation certificates going live in the second week of April.

The biggest glitch at the moment with the portal is that it only allows individuals to register, with GST registration details being mandatory. Most of these dealers would fall under the category of companies and organisations.

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“When we are trying to register ourselves as a used car dealer on the portal, it had a form which asks about the applicant’s name, and then son or wife or daughter and so on. So, it looks like the form is meant only for an applicant who is an individual. There is no field for an entity name," a senior executive of one of the largest online used car marketplaces told Moneycontrol, seeking anonymity.

The person added that in India, more than 80 percent of used car dealers will not fall under the GST threshold.

A spokesperson from Spinny said, “From our end, it’s a great initiative from the government which would enable much-needed good practices in the category and would benefit the customers and help in concrete processes.
“(As) for the glitches, considering it’s a big move, there are bound to be teething issues, which we are certain would be addressed soon,” the spokesperson added.

Detailed queries sent to Olx Auto and Mahindra First Choice did not elicit a response at the time of publishing. Any comments or views from them will be updated in the article.

While overall, the industry believes regulating the used car market is a great move for the ecosystem, concerns have been raised about some of the guidelines too, as they needed more clarity. The guidelines were implemented in December 2022, following deliberations on the draft guidelines released in September last year.

Key concerns raised

Not just the bigger players, on April 4, the Kerala State Used Vehicle Dealers & Brokers Association filed a writ petition at the Kerala High Court highlighting several concerns around the guidelines. A copy of the petition was seen by Moneycontrol.

The second major issue is the terms of clarifications needed for deemed ownership from one dealer to another. When a dealer purchases a car from another seller, he has to fill Form 29 C. As the deemed owner now, ideally the dealer will be liable for any future issues related to the vehicle, be it an accident, traffic violations or penalty, until the actual ownership of the vehicle is transferred to the end buyer.

According to the first source cited above, the current rules do not provide any clarity in the case of multiple deemed owner transfers happening in between.

“In India, the market works in such a way that used cars change hands from dealer to dealer before they finally reach the end customer. So, in the absence of clarity in the rules about the transfer of this deemed ownership from one dealer to another dealer, unfortunately, the first dealer who purchased the car will continue to be the deemed owner of the vehicle and be liable for any issues related to the vehicle, despite the vehicle being already sold to another dealer, maybe several days ago,” the source said.

Rameesh Kailasam, Chief Executive Officer (CEO) of IndiaTech.Org, a start-up industry association, concurred: “Suppose a dealer is in Mumbai, and the buyer of his car is in Delhi. So, he’ll usually loop in another dealer in Delhi to make the final sale to the buyer. But the provision doesn’t have the concept of multiple deemed owners; it talks only of one deemed owner,” he explained.

IndiaTech.Org, along with most of these online platforms mentioned earlier, have already had two to three rounds of meetings with the concerned government bodies and is hopeful that the issues will be sorted out soon.

Another issue that the industry wants to be solved is to have a centralised way of registration. At present, used car dealers, especially the online ones which procure cars from across different states and cities, have to individually apply for Regional Transport Office (RTO) registrations for each region. Dealers Moneycontrol spoke to said that it hampers the ease of doing business.