The state tax department is preparing to levy the Goods and services tax (GST) on revenue generated through the transport department via the online auction of fancy (VIP) vehicle registration numbers.
Also, the department is planning to impose GST on revenue made by the transport department via the license fee assessed through it from driving schools in the state.
It was claimed by the officials that proposing the premium registration numbers comprises a value-added service under GST regulations, which makes it charge to tax at an 18% rate or exceeding that.
A senior state tax official cited that we asked for data from the transport department on the revenue they made via the online booking and afterwards auction of fancy registration numbers and it was discovered that between 2018-19 and December 2023, over Rs 285 crore additional revenue was made via them from the same practice.
This timeframe also encompasses two years impacted by COVID-19, during which vehicle sales were minimal.
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Some registration numbers are consistently sought after by buyers. In the past, the transport department would get suggestions and requests from different sources regarding the allocation of the number 0786, for example.
To avert the same situation the department has initiated selling such numbers via online auction. Rs 1 to 2 lakh or more has been paid by numerous buyers for specific numbers assumed to be auspicious.
The transport commissioner office data collected shows that in 2018-19, the department sold 40,752 fancy numbers earning an additional revenue of Rs 24.89 crore, and in 2019-20 earning ₹25.46 crore revenue by selling 32,653 numbers.
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The figures went up in 2020-21 when 35,277 numbers were sold for Rs 30.06 crore. In 2021-22 the upward trend would be carried on when the department has made Rs 46.32 crore by auctioning 55,071 numbers.
In 2022-23 the figures have been increased saw the transport department make an additional revenue of Rs 72.44 crore by auctioning 99,140 fancy numbers. Surpassing all previous records in 2023-24, the department sold 137,344 fancy numbers making a whopping Rs 99.03 crore.
An important measure was being taken to impose GST on the revenue of the transport department from the online auction of fancy numbers as the same is not a condition, but a luxury that certain buyers indulge in, state tax department official cited.
The official cited that the GST levy shall not affect the transport department as they can recover GST from the buyers and pay us as indirect tax, as per the official.
The state tax department is acknowledging to levy of the GST on the licence fees gathered via driving schools. The same came to know that the transport department is not enrolled under GST and the tax department is been asked to finish the process of registration.
