Customs and Registration for Imported Vehicles

Details on clearing customs and registering an imported vehicle for use on the road in India…

Customs Duties

Foreign vehicles imported into India are subject to customs duties that cost more than the retail price at the time of purchase. On average, expect to pay about 102 percent duty on a new vehicle or 160 percent on a used vehicle. These rates include:

  • Basic customs duty (35 percent)
  • Special excise duty (24 percent)
  • Additional duty (16 percent)
  • Surcharge on customs duty (10 percent)
  • Special additional duty of customs (4 percent)
  • Motor vehicle cess (0.125 percent)

Used vehicles are charged custom duties according to their depreciated price at the time of importation. In other words, duty has to be paid on a certain percentage of the vehicle’s original retail price, based on its age. The rules on depreciation are as follows:

Period of use Depreciation allowed
For every quarter during first year 4%
For every quarter during second year 3%
For every quarter during third year 2.5%
For every quarter during fourth year 2%

There is a maximum depreciation of 70 percent permitted on used foreign vehicles.

Vehicle Testing

All imported vehicles must be tested for compliance to the government requirements outlined in the Exim Policy (2001), Central Motor Vehicles Act (1988) and Central Motor Vehicle Rules (1989).

Vehicles can be tested at the following locations:

  • Ministry of Defence’s Vehicle Research and Development Establishment in Ahmednagar, Maharashtra
  • Automotive Research Association of India in Pune, Maharashtra
  • Central Farm and Machinery Training and Testing Institute in Budni, Madhya Pradesh

Vehicle testing can be waived on the importation of luxury cars with a value of at least Rs20 lakhs (Rs2 million).

Registering Foreign Vehicles

After going through customs, non-commercial vehicles must be registered at the local branch of the state government’s Regional Transport Authority/Office (RTA/RTO). Vehicles must initially be temporarily registered, so that they can be transported from the port of entry to the either a testing site or the owner’s residence. Within seven days of delivery, the vehicle owner must apply for permanent registration.

The government’s Central Motor Vehicles Act (1988) decrees that an owner must apply for a vehicle to be registered before it can be driven in a public place. All permanently registered vehicles must have a visible registration mark (licence plate) displayed.

Temporary Registration

Temporary registration is issued for seven days to allow a new vehicle to be transported to the owner’s residence. There are minor variations between states on the required forms and documents needed to apply for a temporary registration for an imported vehicle. However, the following are required by the RTO/RTA in all states:

  • Application form (can be downloaded from the RTO/RTA website)
  • Copy of a valid car insurance certificate
  • Copy of the pollution under control certificate, which is issued after a vehicle has been tested
  • Proof of address
  • Copy of the roadworthiness certificate, which is issued by the vehicle’s manufacturer
  • Copy of the customs clearance certificate
  • Registration fee (varies by state)
  • Road tax (varies by state)

Further information on the regulations and the forms required for temporary registration can be found on each state government’s RTO/RTA website.

Permanent Registration

There are minor variations between states on the required forms and documents needed to apply for a permanent registration for an imported vehicle. However, the following are required by the RTO/RTA in all states:

  • Application form (can be downloaded from the RTO/RTA website)
  • Copy of a valid car insurance certificate
  • Copy of the pollution under control certificate, which is issued after a vehicle has been tested
  • Proof of address
  • Copy of the roadworthiness certificate, which is issued by the vehicle’s manufacturer
  • Copy of the customs clearance certificate
  • Road tax (rate varies by state) – not applicable if bought during the temporary registration process
  • Registration fee (varies by state)

The RTO/RTA will issue the vehicle registration number and mark after the application and fees have been submitted. Vehicle owners have the option of purchasing special vehicle registration numbers, which cost between Rs1,000 and Rs50,000.

Further information on the regulations and the forms required for permanent registration can be found on each state government’s RTO/RTA website.