Since 1 April 2023, buying and selling pre-owned cars as a business in India needs a licence of its own: an authorisation certificate for dealers of registered vehicles, issued by your RTO. Many showrooms still run the old way, holding a signed Form 29 and Form 30 in a folder and transferring the car straight from the old owner to the next buyer. The rules now expect something different, and they move a lot of responsibility onto the dealer.
This guide goes through the rules as they were notified, form by form, and what each one means on a working showroom floor. It is based on the Gazette notification itself (linked at the end), not on news summaries, several of which mix up the form numbers.
Where the rule comes from
The Ministry of Road Transport and Highways notified G.S.R. 901(E) on 22 December 2022: the Central Motor Vehicles (Twenty-sixth Amendment) Rules, 2022. It added Rules 55A to 55H to the Central Motor Vehicles Rules, 1989, and six new forms, 29A to 29F. The rules came into force on 1 April 2023. The ministry's stated aim was to deal with disputes over third-party liability and the difficulty of identifying who was responsible for a car while it sat between owners.
Do you need a dealer authorisation certificate?
Rule 55A(1) is short: no person shall act as a dealer of a registered vehicle without a valid authorisation certificate in Form 29B, issued by the registering authority where they have their place of business. The rules describe an authorised dealer as one authorised to engage in the sale or purchase of registered vehicles. If buying and selling registered, pre-owned cars is your trade, this is aimed at you. It is a different document from a trade certificate, with its own forms and its own fee.
How to apply: Form 29A
The application for a new certificate or a renewal is Form 29A, made online on the VAHAN portal to the RTO where your business is. Some states also list the service on their own citizen portals, but the application itself runs through VAHAN. Form 29A asks for:
- You and your businessApplicant's name and parentage, full address, mobile number and email address.
- Place of businessThe address, with a layout plan showing the area attached. Have the plan drawn before you start the application.
- Registration of the businessA certificate of incorporation, Shop Act registration or Udyam registration.
- Tax registrationsA valid GST registration and a valid PAN.
- The feeTwenty-five thousand rupees for grant or renewal, under the fee table in Rule 81.
- A declarationThat the certificate is for bona fide trade, that you will be solely responsible for any incident involving vehicles in your possession, and that you will keep your inventory electronically on the portal.
The certificate itself: Form 29B
The RTO issues the certificate in Form 29B on the portal, downloadable and printable. Four details in Rule 55A are worth knowing before you apply:
- Thirty days, then deemed approvedThe RTO is to decide within thirty days of receiving the application. If it does not, the application is deemed approved and the certificate deemed granted or renewed through the portal.
- No refusal without a hearingAn application cannot be refused unless you are heard and given the reasons in writing.
- Valid for five yearsFrom the date of grant or renewal. Diarise the renewal; a lapsed certificate means you are trading without one.
- Displayed, and no stock on the roadThe certificate must be shown at a conspicuous place at your business. And Rule 55A(7) says an authorised dealer may not park or store inventory for sale on any public road, which matters for every showroom whose stock spills onto the service lane.
When a car comes in: Form 29C
This is the form that changes daily work. When an owner hands a car to you, Rule 55B requires the owner to inform the RTO where the car is registered through Form 29C, submitted on the portal and signed by both the owner and you. The portal generates an acknowledgement number. The form records the car's registration, chassis and engine numbers, your authorisation certificate number, and that the RC, PUC certificate and insurance certificate have been handed over.
The owner's declaration in Form 29C is the part to read closely. The owner declares that no tax demand or challan is pending on the vehicle, that it is not involved in a criminal case or a pending accident case, that it is not held under hire-purchase, lease or hypothecation, and that it is free of encumbrances. In practice, a car with a live bank loan on the RC needs the hypothecation closed before this form can be signed honestly. Check challans and hypothecation on the day you inspect the car, not the day you file.
Your half of the form says you have taken possession of the car and its documents and that you are solely responsible for the validity of those documents and for any incident involving the car from then on.
What changes once Form 29C is filed
Under Rule 55C, after Form 29C is submitted you are the deemed owner of the vehicle. You are solely responsible for the validity of its documents and for all incidents relating to it. A challan from a test drive, an accident on the way to the painter, an expired insurance policy on a car sitting in your stock: these are now yours.
The same rule gives you powers to match. For vehicles in your possession you can apply for renewal of the registration certificate, renewal of the fitness certificate, a duplicate RC, a No Objection Certificate, insurance, and transfer of ownership. That is a real improvement on chasing a seller who moved to another city for one more signature.
If the owner takes the car back, the owner files Form 29D on the portal, again signed by both of you, quoting the Form 29C acknowledgement. The RC, PUC and insurance go back with the car.
The inventory register: Form 29E
Rule 55C(3) requires your inventory to be kept electronically in Form 29E on the VAHAN portal. For each car it records the registration number, vehicle class, chassis and engine numbers, the date of the Form 29C intimation and the RTO it went to, the date of sale, the date of transfer of ownership and the RTO where it happened, the date of any return to the original owner, and the acknowledgement numbers for Forms 29C and 29D. In other words, every car's journey through your stock is visible to the registering authority.
How you may use stock cars: Rule 55D
A car you hold under Form 29C may be used in a public place only for three purposes:
- A trial or demonstrationA reasonable test drive or demonstration for a prospective buyer.
- Repairs and paintingGoing to or returning from a service centre for painting or repairs.
- CertificationGoing to or returning from a vehicle inspection and certification centre or a PUC centre, to renew the RC, fitness certificate or PUC.
While a stock car is out on the road for any of these, your authorisation certificate number must be shown legibly on a conspicuous part of the car, readable from at least fifteen metres. A salesperson using a stock car to run errands, or to get home, is outside the rules.
The trip register: Form 29F
Rule 55E requires an electronic trip register in Form 29F on the portal. Before each trip, you or your representative enter the date, the registration number, the purpose, the driver's name and licence number, and the time the car left your premises. A printout of the entry travels with the driver and must be produced on demand to an officer. When the car comes back, the return time is filled in. The register is open to inspection by the RTO.
This is where paper systems tend to fail. Test drives happen on a busy Sunday, the driver who took a car to the denter forgets to say when he returned, and the register gets filled in later from memory, if at all.
Suspension, cancellation and appeals
If the RTO has reason to believe you are not complying with Rules 55C to 55E (deemed ownership duties, inventory, use of stock cars, trip register), it reports this with proof to the head of the state's Motor Vehicles Department, who may suspend or cancel your certificate after giving you a hearing. Anyone aggrieved by a refusal, suspension or cancellation can appeal within thirty days to the authority the state designates, with a memorandum of objections, a certified copy of the order and a fee of one thousand rupees. The appellate authority is to decide within thirty days.
A working checklist for the showroom
- OnceForm 29A filed with the layout plan, GST, PAN and business registration; Form 29B certificate displayed; renewal date five years out in the calendar; certificate number ready to display on cars taken out.
- At purchaseChallans and hypothecation checked; loan closed if there is one; Form 29C signed by the owner and you and submitted; acknowledgement number stored against the car; RC, PUC and insurance in hand.
- While in stockInsurance and PUC kept valid; every trip logged in Form 29F before the car leaves; stock parked off the public road.
- At saleTransfer of ownership applied for in your capacity as authorised dealer; dates of sale and transfer reflected in the Form 29E inventory.
The transfer itself still runs on the familiar forms; our guide to RC transfer for a used car covers Forms 28, 29, 30, 34 and 35, and the paperwork checklist lists what to collect at purchase and sale. Rules and portal steps are revised from time to time and some details vary by state, so confirm the current position with your RTO before relying on any single point here.
Where Kenro Dealership fits
The government forms are filed on the government portal. Kenro Dealership does not file them for you. What it does is keep the showroom's own record straight, so the filings are easy and nothing is left to memory. Purchase documents are captured against the car the day it is bought. Each car carries its stage from procured to delivered, and RTO cases, HPA release and the agent handling them have their own screens. Test drives are scheduled, issued a gate pass, and their start and finish recorded, with overnight drives needing the owner's approval first. Driver tasks cover pickup, drop, RTO runs and the final delivery, and the audit log shows who did what to which car, and when. It is running in production at a Delhi showroom; see what it covers.
Questions dealers ask
Is the dealer authorisation certificate compulsory for used car dealers?
Rule 55A says no person shall act as a dealer of registered vehicles without a valid authorisation certificate in Form 29B. The rules have applied since 1 April 2023.
What is the fee and how long is the certificate valid?
The fee for grant or renewal is twenty-five thousand rupees under Rule 81, and the certificate is valid for five years from the date of grant or renewal.
What happens if the RTO does not respond within thirty days?
Under Rule 55A(3), an application not disposed of within thirty days is deemed approved, and the certificate is deemed granted or renewed through the portal.
Can I keep my stock cars parked on the road outside the showroom?
No. Rule 55A(7) says an authorised dealer may not park or store inventory of vehicles for sale on any public road.
Who is responsible for a challan on a car in my stock?
Once Form 29C is submitted, Rule 55C makes the dealer the deemed owner, solely responsible for the car's documents and for all incidents relating to it.