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Automobile dealers can now apply for trade certificates online to receive stocks from OEMs

Mamuni Das New Delhi | Updated on April 08, 2021

Facility will enable govt to track vehicles even prior to registration

Trade certificate — a document needed to move vehicles from manufacturers to dealers before they are registered — can now be applied online.

As opposed to filing in physical format, the recent move will help authorities track vehicles online through the government system before they are registered, explained multiple sources.

At present, vehicles enter the government’s online database – Vahan – only after they are registered, explained a government official. A vehicle registration certificate — that holds details such as owner’s name, commercial or private use, chassis number among others — is issued after a vehicle is sold and these details are captured online.

Explaining the trade certificate concept, SP Singh, Senior Fellow, Indian Foundation of Transport Research and Training (IFTRT) told BusinessLine that transporting vehicles from an automobile factory to a dealer requires a trade certificate from the Regional Transport Office.

“The trade certificate has to be obtained not just by the dealer, but by vehicle financiers also, as they are also equally responsible stakeholders for a vehicle,” added Singh. After obtaining a trade certificate, a dealer can issue temporary registration number to a vehicle that is sold in one State but registered in another.

Singh reckons that putting vehicles prior to registration on the tracking system online will make the process transparent and can potentially help the government in implementing mandatory vehicle recall mechanism.

Supports recall policy

The mandatory vehicle recall policy for manufacturers has come into effect from April 1 in India, replacing the earlier prevalent voluntary recall mechanism.

According to the policy, a vehicle recall process can be started basis the extent of identical defects reported by consumers for a particular type of vehicle.

And depending on the number and types of vehicles that have to be recalled, the government can impose fine of up to ₹100 lakh. The vehicle manufacturer has to pay this amount for each such batch of defective vehicles.

Published on April 07, 2021

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