E-Paper
Auction of special vehicle numbers a big money spinner, to attract GST
Officials argue that offering premium registration numbers constitutes a value-added service under GST regulations, making it taxable at the rate of 18% or more.
The state tax department is gearing up to impose the Goods and Services Tax (GST) on revenue generated by the transport department through the online auction of fancy (VIP) vehicle registration numbers.
The department is also planning to levy GST on revenue earned by the transport department from the licence fee charged by it from driving schools in the state.
Officials argue that offering premium registration numbers constitutes a value-added service under GST regulations, making it taxable at the rate of 18% or more.
“We recently sought information from the transport department on the revenue they earn through the online booking and subsequent auction of fancy registration numbers, and it was found that between 2018-19 and December 2023, over ₹285 crore additional revenue was earned by them from this practice only,” a senior state tax official said.
This period also includes two years of COVID years when the sale of vehicles was nominal.
There are certain registration numbers which remain much in demand by buyers. Earlier, the transport department would receive recommendations and pressure from various quarters for allotment of these numbers, 0786, for example. To avoid this situation, the department started selling these numbers through online auction. Many buyers pay ₹1-2 lakh or even more for certain numbers thought to be auspicious.
Information gathered from the transport commissioner’s office revealed that in 2018-2019, the department sold 40,752 fancy numbers earning an additional revenue of ₹24.89 crore and in 2019-20 sold 32,653 numbers earning ₹25.46 crore revenue.
The figures went up slightly in 2020-21 when 35,277 numbers were sold for ₹30.06 crore. The upward trend continued in 2021-22 when the department earned ₹46.32 crore by auctioning 55,071 numbers.
The figures surged significantly in 2022-23 that saw the transport department earn an additional revenue of ₹72.44 crore by auctioning 99,140 fancy numbers. Breaking all previous records in 2023-24, the department sold 137,344 fancy numbers earning a whopping ₹99.03 crore.
The state tax department official said necessary action was being taken to levy GST on transport department’s revenue from the online auction of fancy numbers because this is not a necessity, but a luxury that some buyers indulge in.
“The levy of GST will not affect the transport department because they can always recover GST from the buyers and pay to us as indirect tax,” the official said.
Additionally, the state tax department is considering imposing GST on the licence fees collected from driving schools. It has also come to light that the transport department is not registered under GST, and the tax department has directed it to complete the registration process.
