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Old 1st November 2011, 16:33   #16
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Default Re: Govt plans to impose additional levies on cigarettes and diesel cars

This is depressing. First, the govt has irrational amount of taxes on petrol, forcing people to turn towards more expensive diesel cars. And now, double whammy by increasing tax on diesel cars. Looks like the govt thinks car owners are there just to be milked.

All of this would have been somewhat palatable if we had good public transport, but that is anyway crumbling in cities. Metros are just starting to be constructed in a few cities, and even there reach is very limited. Buses are crowded and timings unreliable. Autos are a pain in most cities. So one needs private transport to commute safely and reliably.

Does anyone know what would be the affect in rupee terms - for example, if the excise duty goes up from 10% to 22%, how much is that, for say a car that costs 5-6L ex-showroom ?
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Old 1st November 2011, 16:45   #17
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Default Re: Govt plans to impose additional levies on cigarettes and diesel cars

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Originally Posted by tsk1979 View Post
I don't think many people realize that the carbon footprint of a a diesel car is much less than that of a similar petrol car.
Sure, add a 50,000/year tax to diesel cars to dissuade people from buying diesel cars, but when all of them start buying petrol vehicles, its going to be problem, esp if India starts dealing in carbon credits and all seriously.
Well said but for sure you would get drowned out soon enough by talks about black soot and sulphur poisoning , etc - this debate has happened many times ! On a related note
Business Line : Companies News : Oil retailers seek Rs 1.82/litre petrol price hike - petrol prices may also increase

Screw the diesel owners and screw the petrol owners that seems to be the motto - at the end of the day as sgiitk mentioned the honey pot has to be large enough to sustain the looting habits of a select few
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Old 1st November 2011, 17:02   #18
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Default Re: Govt plans to impose additional levies on cigarettes and diesel cars

The actual motto of giving subsidy for diesel is already dead. Very less percentage of farmers is getting the actual benefit. Instead the people who purchased the high end diesel vehicle are enjoying the day to day benefits of this subsidy. Doesn't it look like injustice to the actual motto? People who can buy luxury cars can pay the extra diesel tax?
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Old 1st November 2011, 20:44   #19
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Unhappy Re: Govt plans to impose additional levies on cigarettes and diesel cars

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Originally Posted by kiran View Post
The actual motto of giving subsidy for diesel is already dead. Very less percentage of farmers is getting the actual benefit. Instead the people who purchased the high end diesel vehicle are enjoying the day to day benefits of this subsidy. Doesn't it look like injustice to the actual motto? People who can buy luxury cars can pay the extra diesel tax?
True Kiran, I grow paddy and 100 rupees in all is what we get as grant for cultivating an acre in a year (Its for two crop seasons). We dont get any subsidy for Diesel, Kerosene or electricity and we have to pay 500Rs/worker/7Hr workday for labour. A tiller charges 360Rs/Hr of tilling. No further subsidy or grant on Diesel there. We are also not permitted by law to do other profitable cultivation or to leave the land fallow for more than three years at a stretch. When thats what a farmer gets why should a pai at all even go into Diesel Barge owner's pockets? Encouragement for thinning the ozone layer fast?

Increasing the taxes and levies on Diesel cars is the only option for the Government in my opinion. I guess whats keeping them from doing this is that they as well as their peers are probably Diesel barge owners themselves.

Mods:Pardon me, I might be OT here, But I just needed to let people know about a farmer's take on the issue.

Last edited by jalex77 : 1st November 2011 at 20:54.
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Old 2nd November 2011, 06:47   #20
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OT (I guess) but the government has to increase tax base. In the long term there is no other way. Remove exemptions, reduce tax rates, tax agricultural income.</rant>

Short term vision afflicts a lot of people and our government is not immune to that.

One of the posters talked about supply side inflation and that is true. Where is the next green revolution?
Recently saw the news that the 7B child was born here. Who is planting the wheat (or rice) for her?

We need healers and visionaries governing the country and not BandAid governance types who lurch from crisis to crisis.

Disclosures (in full faith): I smoke and was planning to buy a diesel SUV in a couple of years.

Edit: quoting after earlier post.

Quote:
Originally Posted by jalex77
We are also not permitted by law to do other profitable cultivation or to leave the land fallow for more than three years at a stretch.
But I just needed to let people know about a farmer's take on the issue.
Wow. Seriously! You can not grow anything else on that? That sure sucks. Your land! Your seed! Your crop!
Maybe I'm a conservative when it come to economy.

Per my prev post, I don't have a grouse with farmers but rich folks like actors and businessmen masquerading their income as agricultural income and not paying taxes on that gets my goat.

Last edited by rtandon : 2nd November 2011 at 06:57.
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Old 2nd November 2011, 08:01   #21
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Default Re: Govt plans to impose additional levies on cigarettes and diesel cars

Instead of burdening car owners with more tax the govt can provide two types of diesel fuel. One with superior quality and other diesel which CRDI engines cannot run(poor quality) but non ecu engines can run. This way the govt can increase the price of premium diesel and keep subsidy for the other type of fuel. Nobody will risk putting inferior diesel on their modern engine.

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Old 2nd November 2011, 08:23   #22
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Default Re: Govt plans to impose additional levies on cigarettes and diesel cars

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Originally Posted by kadanaJ View Post
I don't mind paying extra taxes as long as I know it's ultimately going to benefit me at the end of the day.

Unfortunately, in our country, that rarely seems to be the case. It'll most likely end up in some politicians pocket.
I absolutely agree with u. This is another way of collecting more money in the form of taxes so that such money can be made a part of another 2g or common wealth games kind of big scam.

In fact the government if it can stop scams, scandals and black money should seriously think of atleast taxing the scams, scandals and black money. God save the country and diesel car buyers.

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Old 2nd November 2011, 09:48   #23
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Default Re: Govt plans to impose additional levies on cigarettes and diesel cars

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Originally Posted by vijaycool View Post
Instead of burdening car owners with more tax the govt can provide two types of diesel fuel. One with superior quality and other diesel which CRDI engines cannot run(poor quality) but non ecu engines can run. This way the govt can increase the price of premium diesel and keep subsidy for the other type of fuel. Nobody will risk putting inferior diesel on their modern engine.
There are two grades of diesel - HSD and LDO. Vehicles use HSD. Then remember most HSD is already 'laced' with kerosene, esp. in rural and semi-urban areas.
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Old 2nd November 2011, 10:06   #24
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Default Re: Govt plans to impose additional levies on cigarettes and diesel cars

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Originally Posted by tsk1979 View Post
I don't think many people realize that the carbon footprint of a a diesel car is much less than that of a similar petrol car.
Sure, add a 50,000/year tax to diesel cars to dissuade people from buying diesel cars, but when all of them start buying petrol vehicles, its going to be problem, esp if India starts dealing in carbon credits and all seriously.
Yes, you are correct in that diesel engines produce less CO2 and a switch to petrol will create greater CO2 emissions. India has been dragging its feet on carbon credits for a while now. If in the future India actually starts dealing in carbon credits it will be only because of generous additional
compared to N. American and European quotas similar to what China has demanded as a starting point for negotiations. So in practice we may not need to worry as much about the impact on India's net carbon emissions if passenger vehicles in India are made to trend petrol due to taxation on passenger diesels.

Most Indian diesel vehicles are fitted with diesel engines that do not satisfy Euro 5 norms (where diesel engine emissions of NOx and particulate matter is greatly reduced). So an increase in CO2 emissions (if passenger vehicles are made to trend petrol) would also be compensated for by fewer NOx and large particulate matter. The latter is a cause for concern for health of all Indians who are forced to breathe in the particulates (e.g. large metro areas) and for asthmatics and children with asthma (which has also increased in India over the 2001-2010 time period).
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Old 2nd November 2011, 10:43   #25
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Default Re: Govt plans to impose additional levies on cigarettes and diesel cars

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Originally Posted by Cheiron View Post
Yes, you are correct in that diesel engines produce less CO2 and a switch to petrol will create greater CO2 emissions. India has been dragging its feet on carbon credits for a while now. If in the future India actually starts dealing in carbon credits it will be only because of generous additional
compared to N. American and European quotas similar to what China has demanded as a starting point for negotiations. So in practice we may not need to worry as much about the impact on India's net carbon emissions if passenger vehicles in India are made to trend petrol due to taxation on passenger diesels.

Most Indian diesel vehicles are fitted with diesel engines that do not satisfy Euro 5 norms (where diesel engine emissions of NOx and particulate matter is greatly reduced). So an increase in CO2 emissions (if passenger vehicles are made to trend petrol) would also be compensated for by fewer NOx and large particulate matter. The latter is a cause for concern for health of all Indians who are forced to breathe in the particulates (e.g. large metro areas) and for asthmatics and children with asthma (which has also increased in India over the 2001-2010 time period).
So does it not make more sense to bring in EU 5 norms. EU 5 will mean diesel cars will be more expensive due to particulate filters and like.
And they will be significantly less polluting and be greener than petrol cars.
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Old 2nd November 2011, 10:51   #26
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Default Re: Govt plans to impose additional levies on cigarettes and diesel cars

I don't understand the tax on only Diesel cars. Would it be a temporary one? I understand Diesel is subsidised and people buying diesel cars have a unfair advantage. What would the government do if crude prices go down. Wouldn't it be a burden for diesel car owners. Will they be re-considering the tax then? What about the already sold cars? aren't they getting an unfair advantage?

Probably a yearly surcharge on Diesel cars along with insurance makes more sense. This can go directly to a pool to compensate the OMCs for their subsidy burden.
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Old 2nd November 2011, 11:28   #27
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Default Re: Govt plans to impose additional levies on cigarettes and diesel cars

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Originally Posted by Cheiron View Post
Yes, you are correct in that diesel engines produce less CO2 and a switch to petrol will create greater CO2 emissions. India has been dragging its feet on carbon credits for a while now. If in the future India actually starts dealing in carbon credits it will be only because of generous additional
compared to N. American and European quotas similar to what China has demanded as a starting point for negotiations. So in practice we may not need to worry as much about the impact on India's net carbon emissions if passenger vehicles in India are made to trend petrol due to taxation on passenger diesels.

Most Indian diesel vehicles are fitted with diesel engines that do not satisfy Euro 5 norms (where diesel engine emissions of NOx and particulate matter is greatly reduced). So an increase in CO2 emissions (if passenger vehicles are made to trend petrol) would also be compensated for by fewer NOx and large particulate matter. The latter is a cause for concern for health of all Indians who are forced to breathe in the particulates (e.g. large metro areas) and for asthmatics and children with asthma (which has also increased in India over the 2001-2010 time period).
Quote:
Originally Posted by tsk1979 View Post
So does it not make more sense to bring in EU 5 norms. EU 5 will mean diesel cars will be more expensive due to particulate filters and like.
And they will be significantly less polluting and be greener than petrol cars.
Absolutely - EU 5 norms will mean better pollution control for all - diesel and petrol.

Implementing EU 5 is a more involved process than a quick increase in taxes by the Central govt. by changing rate of already existent levy/tax. EU 5 implementation is also an indirect way of discouraging diesel subsidy and would take longer. A near-immediate effect would be felt by rate change.

The rate change would also be more targeted than EU 5 norms. The goal is to remove the benefit of diesel subsidy for passenger cars and SUVs while leaving goods transportation, agricultural use alone. I would be remiss if I do not also point out that increasing the rate of tax/levy would not affect diesel consumption for generators etc. that is also a significant fraction of the subsidy that the Central government would wish to eliminate.
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Old 2nd November 2011, 11:40   #28
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Default Re: Govt plans to impose additional levies on cigarettes and diesel cars

Dont understand the logic of this government when there i a boom time they raise taxes, when there is slow down they raise taxes, just this morning i saw the news regarding oil companies loosing money in petrol and talking about raising price of petrol by another 2 Rs. Oil companies loosing money, petrol buyers loosing money i guess only the government is minting money for its own luxuries.
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Old 2nd November 2011, 11:56   #29
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Default Re: Govt plans to impose additional levies on cigarettes and diesel cars

Quote:
Originally Posted by kiran View Post
The actual motto of giving subsidy for diesel is already dead. Very less percentage of farmers is getting the actual benefit. Instead the people who purchased the high end diesel vehicle are enjoying the day to day benefits of this subsidy. Doesn't it look like injustice to the actual motto? People who can buy luxury cars can pay the extra diesel tax?
A bit of reality check is required here - please do consider that a vast category of rich farmers who do not pay a single paisa of tax ! And btw , there are luxury petrol cars also available so they should be taxed too ?

Quote:
Originally Posted by jalex77 View Post
True Kiran, I grow paddy and 100 rupees in all is what we get as grant for cultivating an acre in a year (Its for two crop seasons). We dont get any subsidy for Diesel, Kerosene or electricity and we have to pay 500Rs/worker/7Hr workday for labour. A tiller charges 360Rs/Hr of tilling. No further subsidy or grant on Diesel there. We are also not permitted by law to do other profitable cultivation or to leave the land fallow for more than three years at a stretch. When thats what a farmer gets why should a pai at all even go into Diesel Barge owner's pockets? Encouragement for thinning the ozone layer fast?

Increasing the taxes and levies on Diesel cars is the only option for the Government in my opinion. I guess whats keeping them from doing this is that they as well as their peers are probably Diesel barge owners themselves.

Mods:Pardon me, I might be OT here, But I just needed to let people know about a farmer's take on the issue.
There is no law which prevents you from switching crops , you would have to bear the risk of changed subsidies if you do . I also note that you are silent on the fact that you do not have to pay tax on your agri income , thats also a subsidy , isn't it ? Do you think you should enjoy that benefit ? Its meant for rural poor farmers so if we get into a socialistic debate , lets weed out all benefits that are social anomalies. I am sure that you pay the same price for diesel as we pay so I am not sure where you are coming from when you say "No further subsidy or grant on Diesel there"
BTW, hope you are aware that gasoline engines also deplete Ozone layers so maybe we should go back to horse drawn carriages and bullock carts ? Even Prius is more polluting than a conventional car if you consider the carbon footprint of its entire manufacturing process

I simply hate this over simplistic arguement with the pseudo socialistic hue for taxing diesel vehicles - there are immensely more rational reasoning behind taxing diesel vehicles than that cited by you. It cannot be an excuse to bridge the rich poor divide as the arguement is flawed . If its used by the govt to fill their coffers for development work , etc thats a plausible arguement but lets not be (mis)guided by the masquerading of the corrupt political class.

As suggested by one BHP-ian here , let diesel car owners pay a higher levy every year to be recovered through the annual insurance renewal . Let this levy be decided based on average crude prices which should address concerns about why we should pay a tax if crude prices crash. This would also ensure that usage is being paid for rather the burden being borne only by the new users. Why should a cleaner tech be hampered by a lumpsum charge , we would be shooting ourselves if we do that !

@ tsk1979 ( just saw your post ) - EU 5 norms would mean huge invetsments at the refinery levels , is there a corporate will ( and govt will since most are PSUs) to do the same ? As you rightly pointed out , diesel would need to be priced higher if the capex has to be justified

Last edited by souravc : 2nd November 2011 at 12:23.
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Old 2nd November 2011, 12:13   #30
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Default Re: Govt plans to impose additional levies on cigarettes and diesel cars

I believe that it is unnecessary to discuss if the farmers are rich or diesel car owners are rich. The idea is to keep diesel price low - is to get benefits to the poor farmers. Can anyone deny this? The processing cost, crude oil cost, the levies, transportation costs are more or less equal for Petrol and diesel. How and why the diesel price has been kept low? Is it not only to encourage the farming system? Why the other people should get benefits? What is wrong in asking them to pay little extra tax on extra luxuries they enjoy??
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