What is a Trade Certificate
A trade certificate obtained from the registering authority allows a dealer to receive exemption from registering the motor vehicle owned by him or her although the dealer cannot sell a motor vehicle to another purchaser without the vehicle's temporary or permanent registration. A trade certificate issued by the registering authority is valid only for a period of 12 months from the date it is issued.
Restriction on the Usage of Trade Certificate or the Trade Registration Mark and Number
A trade certificate or the trade registration mark and number can only be used by the person under whose name it has been issued. Only in certain special circumstances can it be used by any other person. These circumstances are:
- If the person driving the vehicle is working under the authority of the person to whom the trade certificate has been issued. This has to be verified by a bonafide document.
- If the person driving the vehicle is doing so on behalf of the folder of a trade certificate.
- If the person driving the vehicle is doing so as a prospective buyer willing to purchase the vehicle from the person to whom the trade certificate has been issued.
Conditions under which a Motor Vehicle with a Trade Certificate can be Used
The different circumstances under which a motor vehicle with trade certificate can be used are:
- If the holder of the trade certificate or another person on behalf of the holder is driving the motor vehicle for the purpose of a test.
- If the holder of the trade certificate or another person on behalf of the holder is driving the motor vehicle for its construction or repair.
- If the holder of the trade certificate or another person on behalf of the holder is driving the motor vehicle to make the sale to a prospective purchaser and/or is returning from the same place.
- If the holder of the trade certificate or another person on behalf of the holder is driving the motor vehicle to make the delivery to the purchaser.
- If the holder of the trade certificate or another person on behalf of the holder is driving the motor vehicle to the workshop for fitting a part it or its repair.
- If the holder of the trade certificate or another person on behalf of the holder is driving the motor vehicle from the airport or the railway station after its delivery to the location.
- If the holder of the trade certificate or another person on behalf of the holder is driving the motor vehicle to or from an exhibition of motor vehicle from where it is to be propositioned for a sale.
- If the holder of the trade certificate or another person on behalf of the holder is driving the motor vehicle for the purpose of return to the financier due to a fault on the part of the party of the financier.
Procedure to Apply for a Trade Certificate
The procedure to apply for a trade certificate is as follows:
- The applicant has to apply for a trade certificate via the Form 16.
- Next, the charge levied for issuance of the trade certificate has to be paid by the applicant to the registering authority. The fee is to be paid as per Rule 81 written under the Central Motor Vehicles Act 1989.
- If the vehicle belongs to any of the categories mentioned below, a separate application has to be made:
- motorcycle
- Invalid carriage
- Light motor vehicle
- Medium passenger motor vehicle
- Medium goods vehicle
- Heavy passenger motor vehicle
- Heavy goods vehicle
- Any other motor vehicle of a specified description
Documents Required for Trade Certificate
The only document required for the applicant to submit to the registering authority is Form 16.
FAQs on Trade certificate
- Are trade certificate applications the same for all motor vehicles?
No. Separate applications are required for each vehicle type - motorcycle, LMV, invalid carriage, medium/heavy passenger or goods vehicle, and other specific vehicles.
- What are the documents required to obtain a trade certificate?
You need Form 16, a dealership letter, workplace map, PAN, GST number, valid address proof, workplace photos and documents, and ID proof like Aadhaar or voter ID.
- What happens after you make the application for trade certificate?
After submission, an officer inspects the workplace. If approved, you pay the vehicle class fee and receive the trade certificate (Form 17), valid for one year.
- Why is the trade certificate important?
It is a mandatory RTO-issued document proving bonafide business under the Motor Vehicles Act and must be displayed on unregistered vehicles.
- What are the purposes for which a trade certificate may be used?
It can be used to move vehicles for weighing, repairs, painting, transport, exhibition, trials, or demonstrations, as allowed under the Motor Vehicles Act.
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