Synopsis
Mumbai luxury car tax evasion: Mumbai RTOs have issued show-cause notices to 19 car dealers over alleged fake rental agreements used to register luxury vehicles in Diu and Daman and avoid Maharashtra’s higher motor vehicle tax. On a hypothetical Rs 2 crore petrol car, the tax difference could be Rs 14 lakh. The crackdown raises a practical question for customers who bought vehicles through these dealerships: could they face tax demands or registration problems?
Rs 2 crore luxury purchase, Rs 20 lakh tax: Mumbai car dealers who saved 14 lakh with Diu and Daman registrations face licence cancellation; what about their customers?.
Consider a luxury petrol SUV priced at Rs 2 crore. Maharashtra’s one-time motor vehicle tax for private petrol cars is capped at Rs 20 lakh, while the rate cited by RTO officials for petrol cars costing more than Rs 10 lakh in Dadra and Nagar Haveli and Daman and Diu is 3%.
On that illustrative calculation, the tax in Diu and Daman would be Rs 6 lakh, compared with Rs 20 lakh in Maharashtra, creating a potential difference of Rs 14 lakh. The calculation explains the financial incentive behind the alleged registration arrangement; it is not the confirmed amount evaded on any particular vehicle. Maharashtra’s official tax schedule sets out the state’s rates and maximum tax.
How the alleged registration racket worked Mumbai RTOs have issued show-cause notices to 19 car dealers over their alleged involvement in registering luxury vehicles outside Maharashtra to avoid the state’s higher motor vehicle taxes, according to TOI.
According to RTO officials, some dealerships initially registered newly purchased vehicles temporarily in Mumbai before transferring their permanent registration to Diu and Daman, where vehicle taxes are lower.
Investigators found that some dealers allegedly used fabricated Leave and Licence agreements to make it appear that buyers lived or operated businesses in the Union Territory. The documents were submitted to support out-of-state registration, even though the vehicles were delivered to and driven in Maharashtra.
In several instances, multiple luxury cars belonging to unrelated buyers were reportedly registered at the same rental address. Buyers’ Aadhaar cards, meanwhile, showed permanent addresses in Maharashtra, ac
Read More