[Delta Wing]

Mod Note: Please continue the discussion in the new CSD buying thread. Thanks!


The armed forces personnel who need a car in immediate future have to suffer a while, due to this:

CSD stops sale of cars to all ranks till June 30

(Background: CSD (Canteen Stores Department) is a central governement facility extended to some central government employees, especially those who have to stay in different and remote places, not of their choice and all across the country, to buy various goods at subsidised rates in accordance with resident state exemptions on taxes, right from a toothbrush to a mattress and bike to a car. The requires the manufacturer to be willing to supply the goods in keeping with the rules for the same. Affected/ benefitting parties in large numbers are soldiers of all arms of the services)

Case in point pertains only to cars. The article linked above was an eye opener and a major lesson in the roundabout ways of bureaucracy ruling its babudom. In essence, the news article says (confirmed by car dealers) the following:

1. The payment made by buyers to CSD doesn't go to dealers directly for payment of the car bought. It is sent to one Fund. The CSD is allotted a separate budget from Supplies and Materials Fund which pays the car dealers. How and why this system is made and persists, who knows can shine a light.

2. In FY 2010-2011, the budget allocation for S&M fund was delayed, hence payments to dealers were delayed, some of whom in turn started witholding car delieveries of buyers who had made full payments to CSD for an arm twisting for an earlier due/unsettled payment, and the cycle got noisy.

3. The highest of committees for tri-services matters was consulted and the matter is under consideration (of whom, who knows can shine another light). Till then, car sale is stopped till 30 June 11.

Anyone with news/ views can please update.

[abhi413]

A blanket ban on car sales thru csd appears a little atrocious really, and that too for 2 months after which the 'situation will be reviewed'. Ridiculous that there should be payment delays. This happens only in India!

[vigneshnr]

Originally Posted by Delta Wing

The armed forces personnel who need a car in immediate future have to suffer a while, due to this:

CSD stops sale of cars to all ranks till June 30


Case in point pertains only to cars. The article linked above was an eye opener and a major lesson in the roundabout ways of bureaucracy ruling its babudom. In essence, the news article says (confirmed by car dealers) the following:

1. The payment made by buyers to CSD doesn't go to dealers directly for payment of the car bought. It is sent to one Fund. The CSD is allotted a separate budget from Supplies and Materials Fund which pays the car dealers. How and why this system is made and persists, who knows can shine a light.

Actually, CSD is not stopping the sales - I think it is the dealers / manufacturers who are taking the call to stop selling through canteens till the money is recovered.

Even few two wheeler manufacturers have withheld sales.
The total outstanding would run into crores.

How can there be shortage of funds in the most funded organisation in the country - defence ?
Moreover, in CSD sales the money is collected in advance from the customers & paid to the dealers / mfrs.

30th June may be just a date, till the money is settled the dealers will hold, I suppose.

[.sushilkumar]

don't know how far this is true but i took delivery via canteen ( para-military / CDS ) just 2 weeks back.
below is process -

1 ) a payment is given to canteen's account via dd / cheque for price of desired as per demand made by canteen.
2 ) upon clearing , canteen raises a demand note with dealer and dealer is asked to bring the car to canteen for inspection along with bill .
3 ) Once Bill is received , the canteen manager raises a invoice in person;s name , get it approved by concerned canteen head .
4 ) once approved , the canteen issues a cheque in the name of dealer for delivery of CAR to the end user.
5 ) based on cheque the car is delivered .

[Delta Wing]

^The news is true.
@.sushilkumar: You were lucky, congratulations. The news says that the car sale was stopped from 26 Apr 11 to all ranks and a few dealers have confirmed that it is so.

[Latheesh]

Just curious, what is the price difference between regular purchase and CSD?

[abhi413]

While it differs from state to state, on an average you can typically save a cool 60 grands on the on road price. The price difference is more for costlier cars.

[deky]

I dont think its only for cars. This ban extends to anything that is against firm demand like fridges, AC's, Car's, 2-wheelers, LCD Tv's etc etc (things that are not available off the shelf in CSD's).

My parents wanted to buy one of those 700ltrs fridge and were told that you cant order that till the ban is lifted.

So dont think this is automobile specific.

Regards

[Delta Wing]

^
That could well be the case. Basically any item for which the existing arrangement is that the money is paid to CSD and CSD pays the dealer, would be in the docks. So, AFD items may not be available. This means the radius of inconvenience is much more than only the people who want to buy a car.

[anjan_c2007]

Thats bureaucracy.The cash/DD/cheque/pay order/money transfer payments made to all Govt of India departments are credited to the Consolidated Fund of India (CFI) or what we know as the exchequer.
To illustrate it better, suppose a budget is sanctioned by a competent authority for a particular work/purchase/expenditure, the money is eventually drawn by the respective department under the designated Head of Account. After the expenses are incurred for the purpose, if some funds are not spent (unspent balance)due to any reason, these have to be deposited back under the identity of the bill under which it was drawn.This unspent balance if someone thinks can be spent later on for any added costs etc is mistaken. The unspent balance goes back directly to the exchequer (CFI). For any other expenses again sanction for a fresh amount has to be sought.
The CSD working is no different hence. The buyer pays for his white goods and the money goes to the CFI.And the CSD has its own budgetary provisions under different heads of expenditure which are allocated to the various canteens depending on the requirements and funds received, from which it appropriates the money to the vendors.All these are audited by maybe internal audit and compulsorily by external auditors.
Perhaps such archaic systems need to be simplified for a better working.
The CSD though headed by an Army official, has civilians in numerous capacities at the middle and lower management levels and also at the ground level.

[drsnt]

This isn't a news for me. I got my 3 cars from CSD and lately many dealers were not willing to take CSD orders. the reason being that the payments were delayed 2-3 months and dealers needed to have "setting" to get their payments cleared.
Only dealers who could manage "setting" were willing to take orders. and most of them were making the interest lost by reducing the discounts to customers.
Here I must mentin that dealer margin is not reduced when a car is delivered thru CSD but due to delayed payments dealers covered it by managing it from "other" ways (read reduced discounts or levying other charges)

Unfortunately my next purchase was schedules for June only. I think that will wait more

[vigneshnr]

Originally Posted by Latheesh

Just curious, what is the price difference between regular purchase and CSD?

I think CSD doesn't attract sales tax and that's the only savings while purchasing thru CSD. Moreover these days, this benefit is being reviewed & withdrawn by many states locally. Say, in bangalore there is no big difference in buying from canteen or from the dealer directly.

[drsnt]

Originally Posted by Latheesh

Just curious, what is the price difference between regular purchase and CSD?

8-12% of ex showroom price of car, varies with states, manufacturer and also dealer to dealer

[Delta Wing]

^AFAIK, the prices in Gujrat, Haryana, Chandigarh, Pondicherry and Tamil Nadu are the least. The prices depend on exemption on sales tax, VAT by the state etc. In Maharashtra, there's hardly any difference, maybe a saving of 20-30 K on 5 L. Exa. The ANHC costs 9.34 L Ex-showroom in Pune. The same through Mah CSD is 8.95 L. The same car in Ahmedabad costs 9.37 L Ex showroom but through Guj CSD is near 8 L. A whopping difference that. The costlier the car, the more the saving.

[dhanushmenon]

Who ever is behind this held up should take some action fast. At the end of the beat it is the customers who stands to bear the brunt. I would say that this comes through at the most inopportune moment with the monsoons fast approaching. May- June i believe is a thick season.