Kerala may allow BH registration for central govt staff with higher road tax

Thiruvananthapuram: The Kerala government is considering allowing Bharat Series (BH) registration for central government employees residing in the state, provided they agree to pay a higher road tax. The government-level discussions are underway to explore the feasibility of this proposal. The state's stance is that BH registration can be permitted so long as it does not lead to a loss of tax revenue.

Kerala had initially withheld approval for the nationwide BH vehicle registration system due to concerns over potential tax losses. The BH registration scheme, introduced by the Centre in 2021, allows private vehicles not to change their registration when moving from one state to another, easing the process for those relocating for work, education, or business.

Under the BH scheme, road tax is paid for two years based on the vehicle’s price, excluding tax. This tax ranges between 8% and 12%. In contrast, Kerala currently imposes a tax of up to 21% on the vehicle’s price, including tax. The state maintains that it alone has the authority to determine road tax rates and has resisted central intervention in this matter. This dispute has reached the courts, where Kerala’s authority to decide tax rates remains unchallenged.

A final decision is awaited regarding the transfer of BH-registered vehicles. In such cases, if the vehicle is bought by another central government employee, the BH status can continue. Otherwise, the buyer must pay the applicable tax and obtain a standard registration.

While central guidelines also extend BH registration to private sector employees of companies operating in more than four states, Kerala is not currently considering this provision. The BH system is already in effect across 15 states and Union Territories.