Pvt auto financiers crib over stamp duty

BUMPY RIDE

Govt’s sudden measure draws flak from hire purchase firms, automen and vehicle buyers

Hyderabad: One out of every three transactions pertaining to vehicles that proceed for agreement of hypothecation/mortgage/hire purchase/lease are being rejected by the Road Transport Authority officials in Telangana State in the last two days. The percentage of rejections is even higher in Ranga Reddy and Hyderabad offices where more than 1,100 new vehicles are registered every day.

Ever since the GO No 55 dated November 26, 2015 came into force which makes it mandatory for vehicles that proceed for agreement of hypothecation/mortgage/hire purchase/lease to pay 0.5% stamp duty of the total value of the agreement, there has been a backlash from finance companies.

Questioning the Transport department, Rohit Kumar Kothari, secretary, Telangana Auto Hire Purchase Association says, “The transport department did not discuss the 0.5 per cent stamp duty proposal with any of the finance companies. Stamp duty does not come under the purview of the Transport department. We are taking legal advice and would be going to court against the GO No 55.” In the past, finance companies did not have to produce the agreement copy to RTA.

Suresh Agarwal, a private financer says, “We are not against the levy of 0.5 per cent stamp duty but it becomes cumbersome if we have to hand over all the agreements to all the RTA offices across the State.” He further adds, “If the Transport department had called for a meeting before issuing a GO we would have suggested for online transfer of documents.

” Auto union leaders too have criticised the new rule as it would be a huge burden on the poor. C Chandrashekar, organising secretary, Telangana Auto Trade Union says, “90 per cent of the new autos are on loans and it is the people from the poor sections who avail the loans. The 0.9 per cent stamp duty is an additional and unnecessary burden. At least the autos should be exempted.”

According to sources it is alleged that the Registration and Stamps department in conjunction with the Transport department was behind the passing of the GO No 55. Representatives of finance companies however have been opposing the move stating that the road transport department does not have the right to collect stamp duty.

With the GO No 55 coming into force several issues have cropped up. For instance, Masood, who purchased a motor cab bearing the number AP 28 TV 3255 got a no objection certificate from Attapur and proceeded to Tirumulgherry RTA for registration but his application was rejected as he was asked to pay stamp duty. He said, “I am already taking a loan and the owner does not want to pay. It is a huge burden.”

In another case, Ramesh who purchased a car on November 24, 2015 is confused and anxious. He says, “The GO was issued on November 26 and I purchased a vehicle on November 24. RTA officials too are not clear on this.”

By T P Venu