Mumbai RTO Cracks Down on Diu-Daman Luxury Car Tax Evasion

Mumbai’s RTO has issued show-cause notices to 19 luxury car dealers over an alleged racket that registered high-end vehicles in Diu and Daman to dodge Maharashtra’s higher road tax.

The scheme

Union Territories like Diu and Daman levy far lower road tax than Maharashtra. Reports say dealers allegedly used fake lease documents to register luxury cars there — saving buyers lakhs on a single vehicle — before the cars were driven in Mumbai.

The Economic Times cited one example: a ₹2 crore luxury purchase attracted roughly ₹20 lakh in tax, but Diu-Daman registration allegedly cut the bill by about ₹14 lakh.

What happens next

• Dealers have 7 days to respond to the notices.
• Non-compliance can lead to licence cancellation.
• The RTO is also examining the liability of buyers who used the route.

A warning for buyers

Vehicle owners should insist on registration in the state where the vehicle is actually used. “Cheap” registration from another state or UT can turn into penalties, back-tax demands and even seizure during enforcement drives.

This is part of a wider crackdown on out-of-state and duty-evading registrations across Indian cities.