6 Aug 2019

Resentment brewing among transporters over Motor Vehicle Amendment

Worries over hike in registration for older vehicles among other issues

There is simmering discontent among the transporters’ association over the sharp increase in the registration fee of older vehicles proposed in the Motor Vehicle Act 2019.

As a mark of protest, some transporters have called for a halt in the purchase of new commercial vehicles for three months. Other issues that have raised hackles include higher GST on trucks, steep hikes in third party insurance, and confusion on whether taxes should be charged on total weight or net weight being moved in a vehicle.

About a year ago, transporters had gone on a strike and they had been assured of their concerns being addressed by the then Finance Minister Piyush Goyal.

All India Transporters Welfare Association (AITWA) President Mahendra Arya told BusinessLine that “The Motor Vehicle Act favors insurance firms over driver-owners. Moreover, the Budget has proposed a two percent TDS on cash withdrawal of over 1 crore. The transport business is largely cash-driven, and even during demonetization, an exception was made for the sector. Another 2 increase in diesel price further adds to the cost at a time when freight charges are on the decline.”

Arya said that they are getting support from various State arms of transport unions.

“There were commitments by the government regarding third party insurance, among others. Several of these have remained unaddressed. We don’t know how this resentment will play out in the future,” said Naveen Agarwal of All India Motor Transport Congress, another transporter’s body.

There is no clarity on the extent of liability the insurers will take in case of accidents, or whether the vehicle owner will have to bear the excess compensation in case the accident compensation was to soar beyond 5 lakh or 2.5 lakh as proposed in MVA. This is an issue that needs to be sorted out by the various stakeholders including the ministries of Road and Finance as well as the insurance regulatory body, said an industry source.

The Motor Vehicle Amendment got Parliament’s approval on Monday. The onus is now on the States to implement the sharp increases in penalties and fines. Some of the issues will be addressed in the rules that will be framed.

Karnataka-based Federation of Lorry Owners Association has protested against the manifold increase in vehicle registration fees stating that the move will hit the weaker sections of society who run the older vehicles.

A four-fold increase in the registration fee and steep hikes in renewal or registration certificate or re-registration fee are pushing vehicle owners to buy newer vehicles. This increase will impact the weaker sections of society who usually buy and run older vehicles at cheaper prices and operate them within their States, said B ChannaReddy, President, Federation of Karnataka Lorry Owners Association.

The higher fines are expected to kick in over the next few days in various States including Delhi — which has more cars than Mumbai, Kolkata and Chennai put together, said sources.