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Old 3rd May 2014, 12:38   #511
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Default Re: Govt plans to impose additional levies on diesel cars

@grammernazi: I am not sure about the source. But this was during the truck strike. All construction had stopped.
@torqueytechie: are any of the items mentioned by you 'not for profit'? If you do subsidize fuel for any of these, does it benefit the society? Or does it simply translate to higher profits for the businessman? You talked about medicines, a course of azithromycin for respiratory infection will cost about Rs 100/- if there was no fuel subsidy, the cost would go up by less than a paisa. I don't think many would worry about that.
In general transportation cost is about 3% of total cost. Fuel subsidy of Rs 6 per litre is about 10%. Therefore total cost would rise by .3%. That means what used to cost Rs 1000/- will cost Rs 1003/-. Not too much I think.
So that is no excuse for not selling diesel at value + zillion % tax.
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Old 3rd May 2014, 15:43   #512
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Default Re: Govt plans to impose additional levies on diesel cars

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Originally Posted by TorqueyTechie View Post
I believe this is good. Deregularize the diesel prices and provide diesel at subsidized rates to only vehicles which are used for ferrying essential commodities.
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Originally Posted by TorqueyTechie View Post
Essential commodities would be as listed in the URL below. It basically is food products like foodstuffs, medicines, iron , steel and few others. So yes sand does not come under essential commodoties for now.
This is easier said than done, now that you've identified the essential commodities, how would you segregate the vehicles that would be used to ferry the essential commodities. What if one gets subsidised fuel against a particular vehicle and uses the same for another vehicle or sells it at a premium to private users.
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Old 6th May 2014, 06:13   #513
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Default Re: Govt plans to impose additional levies on diesel cars

I do agree and I have already said its easier said than done since we Indians are known to outsmart all the rules that government throw at us.

In a serious way, for this to work you would need both officials as well as us to be more honest. (which is making me laugh as I write it). How many of us had jumped the diesel bandwagon without even thinking of the maths when the petrol rates were deregulated. Think of the money that the government as well as the gas companies who are running in losses would be able to recover.
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Old 6th May 2014, 07:46   #514
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Default Re: Govt plans to impose additional levies on cigarettes and diesel cars

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Ordinarily I would look askance at further government intervention in energy markets.

Government's inability to step aside, and let market pricing take over for both petrol and diesel is what continues to amaze.
Other more developed countries do not add differential and whopping amount of tax - so why ours?
Is it because, in some circles of the government, car ownership is thought of as demonstrating profligacy - and hence the tax to demonstrate, how government is for the poor?
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Old 6th May 2014, 08:22   #515
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Default Re: Govt plans to impose additional levies on cigarettes and diesel cars

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Originally Posted by joybhowmik View Post

Government's inability to step aside, and let market pricing take over for both petrol and diesel is what continues to amaze.
Other more developed countries do not add differential and whopping amount of tax - so why ours?
I think Britain, Norway, Italy, France, Portugal, Germany, Sweden and many other developed countries have more tax than us.
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Old 6th May 2014, 10:15   #516
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Default Re: Govt plans to impose additional levies on cigarettes and diesel cars

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I think Britain, Norway, Italy, France, Portugal, Germany, Sweden and many other developed countries have more tax than us.
True, but look at this:
Norway has a petrol price of ~2.8 US dollars and a per capita income of ~100,000 USD.
That is the highest anybody pays for petrol in the world.
India has a petrol price of ~1.3 USD and a per capita of ~1,600 USD.

In absolute terms, we may be paying less for our petrol than many European countries, but please do remember that people there earn at least 30 times what we do. This is precisely why education, housing, petrol and most other things are considered insanely expensive in India.
We have very high costs of living, though not in absolute terms.
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Old 6th May 2014, 10:31   #517
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Default Re: Govt plans to impose additional levies on cigarettes and diesel cars

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Originally Posted by one-77 View Post
True, but look at this:
I wasn't making any comment on anything except what the OP wrote - that other countries more developed than us weren't adding a lot of tax like we do. All I wrote was that there are fully developed countries who add as much tax as us and more.
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Old 6th May 2014, 11:02   #518
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Default Re: Govt plans to impose additional levies on cigarettes and diesel cars

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Originally Posted by carboy View Post
I wasn't making any comment on anything except what the OP wrote - that other countries more developed than us weren't adding a lot of tax like we do. All I wrote was that there are fully developed countries who add as much tax as us and more.
No they do not.
Petrol and diesel may cost 1.5X more than it costs in India, and on the face of it it may seem that they add more tax, but when you go with the "cost to consumer", they actually have lower effective tax.
Lemme explain.
When you drive on a road, petrol is not the only expense in your car
You pay for
1. That flyover not built and the fuel burnt in 30 minutes traffic jam
2. That metro which is not there and to travel 20kms on narrow road and spend fuel for 1 hour
3. That pothole which made your tire go bust and you had to shell out 5000rs on a new tire, alignment and suspension repair
4. The extra night stay hotel charge when that road which was blocked due to landslides because not enough funds were allocated for bull dozers

When you add all these costs, the cost of travel is more in India than in developed countries.

Secondly, the argument makes as much sense as this one

"I always buy from local shop, because he sells me 1kg rice for 50rs, instead of the big shop which sells 5kgs rice for 150rs. So its 100rs more expensive"

Think of the govt as a kiryana shop where you buy facilities.
If you see the volume of services/tax paid you will see India has the highest taxation in the world, much much higher than all the developed countries in the world.
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Old 6th May 2014, 11:09   #519
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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
No they do not.
You are arguing about whether good use is being made of the tax or not. And whether it reduces the cost of travel.

My post wasn't about that - my post was about a very simple detail - there are a lot of developed countries where the tax component of a litre of petrol at the pump is more than that in India (this was in reply to a post which said there isn't).
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Old 6th May 2014, 11:58   #520
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Default Re: Govt plans to impose additional levies on cigarettes and diesel cars

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Originally Posted by carboy View Post
You are arguing about whether good use is being made of the tax or not. And whether it reduces the cost of travel.

My post wasn't about that - my post was about a very simple detail - there are a lot of developed countries where the tax component of a litre of petrol at the pump is more than that in India (this was in reply to a post which said there isn't).
@ carboy - I think @one-77 has explained - in simple terms - the big picture you seem to be overlooking here. You can't isolate just one component and say we have much lower taxes than the developed countries. The point here is that those higher taxes do not bother the people in those countries because of the much higher income levels.

For instance, in Australia, the price of a litre of petrol costs me approx. 0.03% of my monthly income. While in India, that figure would stand at approx. 0.1% - which, as you can easily see, will cause a pretty big difference in the total price of fuel. IMHO the % of tax in the fuel bill becomes irrelevant here.

What @tsk1979 explained becomes relevant when it comes to what we actually end up paying from our pockets. Thanks to the condition of our roads and the traffic manners - we end up consuming more petrol for every kilometer of travel. All this simply translates to us Indians having to spend much more on fuel compared to even those "developed" countries - with noticeably higher tax rates.

Just my two cents!!

Last edited by MaddyCrew : 6th May 2014 at 12:07. Reason: Reworded
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Old 6th May 2014, 12:00   #521
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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
No they do not.
Petrol and diesel may cost 1.5X more than it costs in India, and on the face of it it may seem that they add more tax, but when you go with the "cost to consumer", they actually have lower effective tax.
Lemme explain.
When you drive on a road, petrol is not the only expense in your car
You pay for
1. That flyover not built and the fuel burnt in 30 minutes traffic jam
2. That metro which is not there and to travel 20kms on narrow road and spend fuel for 1 hour
3. That pothole which made your tire go bust and you had to shell out 5000rs on a new tire, alignment and suspension repair
4. The extra night stay hotel charge when that road which was blocked due to landslides because not enough funds were allocated for bull dozers

When you add all these costs, the cost of travel is more in India than in developed countries.

Secondly, the argument makes as much sense as this one

"I always buy from local shop, because he sells me 1kg rice for 50rs, instead of the big shop which sells 5kgs rice for 150rs. So its 100rs more expensive"

Think of the govt as a kiryana shop where you buy facilities.
If you see the volume of services/tax paid you will see India has the highest taxation in the world, much much higher than all the developed countries in the world.

When it comes to Taxation on Fuel, we want compare ourselves to EU or some other advanced country. But when it comes to getting similar quality infrastructure, we whine about how 'we're still a developing country' trite.

We need to make up our mind. I, for one, don't want to pay the taxes at the rate of a 1st world country for a 3rd world country infrastructure where probably 90% of my tax is stolen by corruption.

My 2 paisa.
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Old 6th May 2014, 12:14   #522
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Default Re: Govt plans to impose additional levies on diesel cars

It's our minds that needs to evolve from a prehistoric mentality where cars are a luxury to a daily necessity. Hence fuel should be an open market where companies can compete for prices and a nominal taxation. The government can make more money in this case. Think of this: when you buy a car nowadays, does anyone even notice this much, other than your friends and loved ones? Most don't even car, as owning a car is common/basic need of the present.
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Old 6th May 2014, 12:19   #523
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Default Re: Govt plans to impose additional levies on cigarettes and diesel cars

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Originally Posted by MaddyCrew View Post
This is where what @tsk1979 explained becomes relevant. Thanks to the condition of our roads and the traffic manners - we end up consuming more petrol for every kilometer of travel. All this simply translates to us Indians having to pay much more for fuel than even the countries with higher tax rates.

Just my two cents!!
Could not agree more. Back in the US, a Gallon of Petrol (3.78 l) cost somewhere between 3.5 to 4 USD based on when and where you buy. To put things in perspective, a subway with chips and coke cost approx 7 USD. Think about that for a moment without doing any absolute currency conversions. I can buy 7.5 litres of petrol to fuel my gas guzzling Camry (relative to our hatchbacks) for the price of one economy lunch.
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Old 6th May 2014, 12:54   #524
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Default Re: Govt plans to impose additional levies on diesel cars

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Originally Posted by nitinbose View Post
It's our minds that needs to evolve from a prehistoric mentality where cars are a luxury to a daily necessity. Hence fuel should be an open market where companies can compete for prices and a nominal taxation. The government can make more money in this case. Think of this: when you buy a car nowadays, does anyone even notice this much, other than your friends and loved ones? Most don't even car, as owning a car is common/basic need of the present.
Thank you. That was precisely what I meant ^^^.
But unfortunately, taxes on fuel are an easy way (read no accountability) for the ruling Indian proletariat to fund various projects and initiatives, least related to the vehicular infrastructure, on behalf of which the tax is levied.
So , in a way our spending on petrol or diesel, actually goes towards non-transportation projects... which IMO is not fair economically speaking. I am a firm believer, in the precept, that if something is good for society, there has to be enough economic reason to support it. So, taking petrol tax money and using it to fund something else, is not something I would look at with favour!
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Old 6th May 2014, 14:49   #525
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Default Re: Govt plans to impose additional levies on diesel cars

I find it quite funny.
1. Introduce Fuel efficiency regulations which can only be met by diesel cars
2. Introduce extra tax on diesel cars
3. Profit!!
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