One Bharat, One Road Tax: what the proposal would change for used-vehicle transfers

A proposal for a common road-tax framework across India has put the cost and paperwork of interstate used-vehicle transfers back in focus. The recommendation comes from the Ease of Vehicle Ownership Index 2026, which examined 15 states and Union Territories. The road transport ministry said it would study the recommendations. It announced neither a change to current rules nor a date for implementing the proposal.

What the proposal is trying to fix

Changing the name on a registration certificate and settling road tax are separate tasks. An interstate sale can involve requirements at both the original and destination registering authorities. Paying a tax at the destination does not automatically return any eligible amount paid in the original state. The proposal calls for a common framework and a functioning, time-bound refund process so a buyer or seller can see what is due and when an eligible refund should arrive.

Other recommendations deal with the paperwork itself: standardise the transfer process, connect digital vehicle records, harmonise no-objection certificate requirements and remove a lender’s interest from the record automatically once the loan has been repaid. These measures would still need coordination between the Centre and states.

Why a single published fee can be misleading

Andhra Pradesh led the index with 5.91 out of 10 and Uttar Pradesh finished last with 2.47. The study reported that some respondents paid close to ten times the statutory transfer fee after other costs were included. Those were reported expenses at particular offices, including intermediary charges. They are not fee schedules or amounts every buyer should expect to pay. Around 39% of respondents were still waiting for their registration transfer after completing the transaction.

What buyers and sellers can do now

Before paying a deposit on an out-of-state used vehicle, check the transfer process with both registering authorities. Ask which documents and tax receipts are needed, whether an NOC applies and how the destination authority calculates tax. If a refund is available in the original state, ask who files it and what proof the authority needs. Agree in writing who will submit the transfer paperwork, and keep the acknowledgement until the updated registration is issued. The proposal does not alter those obligations today.