Compliance · Business guide
The documents and licences every vehicle dealer needs.
There is no single "dealer licence" in India — there's a stack of registrations for the business, and a paper trail per vehicle that protects you when something goes wrong. This is the full list, for cars and two-wheelers alike.
General information, not legal advice. Requirements vary by state — confirm with your CA, local RTO and municipal authority.
Licences for the business
- Business registration — proprietorship, LLP or Pvt Ltd, with PAN.
- Shop & Establishment licence — from the municipal authority for your premises.
- GST registration — mandatory beyond the turnover threshold, and the gateway to the margin scheme.
- RTO trade certificate — under Rules 33–38 of the Central Motor Vehicles Rules, 1989, with trade plates for moving in-stock vehicles. State practice varies for used-vehicle dealers; ask your RTO.
- State/police registers — several jurisdictions require second-hand dealers to maintain purchase and sale registers open to inspection. Check what applies locally.
Documents per vehicle — when you buy
- RC (registration certificate) — verify it matches the chassis and engine numbers physically on the vehicle.
- Insurance policy — even lapsed, it establishes ownership history.
- PUC certificate, service records if available.
- Bank NOC + Form 35 if the RC shows hypothecation — non-negotiable before payment.
- Seller KYC + purchase agreement — signed, with the price you actually paid (this is also your GST margin evidence).
- Signed Forms 29/30 from the seller, undated if your state's practice allows, so the eventual transfer doesn't depend on finding them again.
Documents per vehicle — when you sell
- Margin scheme GST invoice — registration number, HSN, GSTIN, taxable margin, tax break-up.
- Forms 29/30 filed for transfer (plus NOC/Form 28 for inter-state moves).
- Insurance transfer initiated in the buyer's name.
- Delivery note + buyer KYC — date, time, odometer reading and condition at handover.
The form-by-form detail — what Form 28, 29, 30 and 35 each do and when they're needed — is in our RTO forms guide →
The honest summary
Every dispute a dealer loses traces back to a missing piece of paper: the NOC nobody collected, the transfer nobody filed, the delivery note nobody signed. The licences get you open; the per-vehicle paper trail keeps you open. A dealer management system that attaches documents to each vehicle and tracks the transfer checklist per sale turns this from discipline into default.
Common questions
Is there one single 'used car dealer licence' in India?
No — there's no single national licence. A compliant dealership is a stack: business registration, Shop & Establishment licence, GST registration, an RTO trade certificate where applicable, and state-specific requirements (some states and police jurisdictions require used vehicle dealers to maintain purchase/sale registers).
What happens if the RC never transfers after I sell a vehicle?
The vehicle remains legally tied to the registered owner — challans, accidents and even criminal liability can trace back. As the dealer in the middle, an incomplete transfer becomes your dispute. Track Form 29/30 submission per sale until the new RC is issued.
Do I need to verify the buyer's identity?
Yes — keep KYC (ID and address proof) for both the seller you bought from and the buyer you sold to, along with signed delivery notes. If the vehicle surfaces in a dispute later, this paper trail is what protects you.
Does hypothecation on the RC matter when I buy stock?
Very much. If the RC shows hypothecation, the seller's loan isn't closed in RTO records — insist on the bank NOC and Form 35 termination before you pay, or the lender's claim follows the vehicle into your stock.
Keep every vehicle's papers in one place.
MotorIQ attaches RC, insurance, PUC and NOC documents to each vehicle and tracks the transfer checklist per sale.
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