After a gap of eight years, the Finance Ministry has upped the price ceiling for purchase of staff cars belonging to Central government offices. Now, it will be ₹6 lakh against a previous ₹4.75 lakh. The Ministry has also updated provisions for the use of staff cars.

Although industry sources said there is no separate category of purchase of cars by the government for official purposes, the government sale category comprises nearly 22 per cent of total purchases. This category includes purchases by the government through tenders or similar mechanisms and by employees on a personal basis.

“Cars up to Net Dealer Price of purchase of ₹6 lakh, available on GeM (Government e-Market Place) only shall be considered for purchase as staff car for official use,” an official memorandum (OM) issued by the Expenditure Department said. Net Dealer Price means the price at which car delivered by a company to the dealer.

After adding Goods & Services Tax (GST), Insurance fee, Road Tax, Registration Fee and other levies (such as MCD parking fee in Delhi), the final price is arrived upon, paid by the consumer. While the GST rate of 28 per cent plus cess and insurance premium is uniform all over India, rates of other levies vary from state to state.

Due consideration

Further, all purchases of new staff cars by way of an addition to the existing fleet, purchase in case of opening of new offices, or replacement, must be made after due and careful consideration based on adequate justification, running and life cycle cost. The decision to buy new cars will be taken by the Secretary level officer, who will take a decision on the model based on prices, availability, ease of maintenance, post sales service, fuel economy, and eco-friendliness.

The OM further said all the Ministries/Departments may aim at replacing fossil fuel based cars hired by them with electric cars (EVs) in Delhi. In cases where existing contracts for hiring of petrol/diesel cars have ended, Ministries/Departments may consider fresh contracts for hiring EVs.


Officers holding the rank of Joint Secretary and above are eligible for staff cars. Heads of Departments drawing pay in the Senior Administrative Grade and above are also eligible for this facility. In case of use of staff cars, transport allowance (₹ 15,750 plus Dearness Allowance) will not be given. An officer is permitted to use the staff cars for non-official uses but only up to 500 km per month, after which they will have to pay ₹3,000 per month. If the usage is beyond 500 km, then additional payments at the rate of ₹24 are to be paid. Such officers will also not be eligible for transport allowance.

Fuel limit

The OM has also set the ceiling for fuel consumption for each staff car at 250 litres per month. Parking of government cars at the residence of officers or drivers should be avoided, keeping in mind the consumption of dead mileage. In case of accidents involving staff cars, the OM prescribes payment to be made by the concerned Ministry/Department beside taking action against the driver. Compensation payment will not exempt the driver from any criminal liability resulting from the accident.

The OM prohibits government employees from mentioning ‘Government of India’ on their personal vehicles.