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Old 17th March 2012, 00:06   #16
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Default Re: The 2012 Budget & the Indian Car Scene : All you need to know

The excise benefit for cars less than 4 meters in length and with engine capacity smaller than 1.2L (Petrol)/ 1.5L (Diesel) saw all manufacturers downsizing the engines in hatchbacks and compact sedans.

It really didn't affect the performance of Diesel engines due to their torque and the use of turbocharger and the works. But most new 1.2L petrol engines are quite a pain to drive. They are neither enthusiastic nor efficient. And on 2 lane roads, quite risky to overtake with.

Now, the excise duty is high for all cars over 4 meters in length, and with engine size larger than 1.5L (Petrol or Diesel). And as rightly mentioned by GTO, some biggies like Renault Fluence & Toyota Altis escape this with their puny engines.

So, will we start seeing the downsizing phenomenon on the 'large' cars as well? I hope not.

Ideally, the excise duty should be based on the real world FE than the CC. There are some large engines which are very efficient and many small engines which are not so. Its high time, the Govt. comes out of this displacement bubble. Else, we will soon be left with a lot of empty space inside the hood.

Last edited by deetjohn : 17th March 2012 at 00:12. Reason: Adding text.
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Old 17th March 2012, 00:13   #17
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Default Re: The 2012 Budget & the Indian Car Scene : All you need to know

The cascading effect of increased Excise Duty would be very high in cities like Mumbai and Bangalore where Road Tax is very high (Mumbai 6% + 4.5% Octroi and Bangalore 18%) which is charged on Ex-Showroom price. As you may all be aware that even if we get discount the govt gets the full excise and road-tax, so its the manufacturer who has to bear the burden.
IMO they should increase the limit for Medium-cars to 1.6 in lieu of 1.5 for level-playing field.
As more than 60% of our population is not in a position of buying any vehicle, they won't be going through the harassment of doing all such calculations and would be laughing at us.
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Old 17th March 2012, 00:16   #18
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Default Re: The 2012 Budget & the Indian Car Scene : All you need to know

I could never understand the link between engine size and exhaust duty. Hypothetically I can make a 1.4 liter gas guzzler, and pay less duty than a 1.6 liter engine with 50% better fuel economy.
It just shows the IQ of the people actually making this budget. The world has moved on, sadly, this country cannot get its head around the fact that with no public transport infrastructure in place, a car is no longer a luxury, its a necessity!
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Old 17th March 2012, 00:20   #19
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Quote:
Originally Posted by oxyzen
I can see where this is going. There is no point earning more in India. First you pay more income tax. Then you pay more for a premium car and then there is more service tax. Way to go..
Not sure where this is coming from; income taxes were clearly reduced in this budget.
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Old 17th March 2012, 01:06   #20
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Quote:
Originally Posted by tsk1979
I could never understand the link between engine size and exhaust duty. Hypothetically I can make a 1.4 liter gas guzzler, and pay less duty than a 1.6 liter engine with 50% better fuel economy.
It just shows the IQ of the people actually making this budget. !
I don't think fuel efficiency is anything but a fig leaf. As a general rule, larger engines are used in larger cars - which are bought by richer people. And our Robin Hood government certainly believes in stealing from the rich. And while this is a car forum, let me assure you that the unexpected 3% extra levy on >1500 cc cars is the least of Pranab's sins in this budget.

But it's not too bad - may be VW will now take the hint and bring in the the Polo with a 1.2 TSi engine instead of sticking to the 1.6. And a Vento or Jetta with a 1.4 TSi sounds good as well (3% excise saving is nothing to sneeze at).

And for those who rushed to buy their diesel Ventos, Superbs, or Beemers just before the budget, take heart - you still saved a pretty packet.
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Old 17th March 2012, 05:14   #21
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Quote:
Originally Posted by neo_trace View Post
What will happen to My Toyota Fortuner?
Which left fectory at 4 pm(15th march) and will reach to me on 17th,18th? Delivery will be on 18th,19th.
Dealer still dont have price increase info!
Am i still going to charged extra Duty ?
What a Luck !!!
The point of levy of excise duty is the factory gate. In other words, once the vehicle leaves the factory gates excise is already deemed to have been levied and therefore will not be levied again (as it has crossed the point of levy which is the factory gate).

For the unfortunate few, whose vehicles are leaving the factory today (i.e on the day of the budget) there is a special act called the "Provisional Collection Of Taxes Act" under which all the rulings of the budget will be levied on the cars that leave the factory gates after the budget has been read out in parliament (pending passing by parliament). So all the vehicles that leave the factory on the day of the budget will be levied with the increased excise duty through the "Provisional Collection of Taxes Act".

Your vehicle will not be affected by the budget increase as it has left the factory on the 15th. So sit back, relax and enjoy as you have escaped the taxman's axe by the skin of your teeth!!
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Old 17th March 2012, 07:25   #22
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Default Re: The 2012 Budget & the Indian Car Scene : All you need to know

Firstly, Awesome thread GTO. Appreciate it.
This gives the exact information a petrol head like me is bothered about from this budget.

Man, even in their dreams Honda, would have not imagined they would end up earning a competitive advantage because of Indian govt. Now ANHC, if I am not wrong will become cheaper than most of is peers in petrol segment.

But no doubt, the brownies for making the roost of Indian insensible taxing system goes to Ford.
1. First, its NFS gets taxed in a segment below thus saving atleast INR 30-40K.
2. Then Ecoboost once launched will make a mockery of the taxation slab, by producing higher BHP with a puny cc engine.

Jai Ho..
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Old 17th March 2012, 08:38   #23
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Quote:
Originally Posted by neo_trace View Post
What will happen to My Toyota Fortuner?
Which left fectory at 4 pm(15th march) and will reach to me on 17th,18th? Delivery will be on 18th,19th.
Dealer still dont have price increase info!
Am i still going to charged extra Duty ?
What a Luck !!!
Excise duty gets calculated and paid at factory gate. So don't accept if they quote a higher price

Quote:
Originally Posted by GTO View Post
[b]
- Indian cars are already heavily taxed. Depending on what segment you are looking at, over 40% of the car's retail price consists of local, state & central taxes.
Another way of looking at it instead of saying that 40% of the price is taxes and levies. It is 66% over the cost of manufacturing + OEM margin

Note from the Team-BHP Support Team : Please use "Multi Quote" option for quoting Multiple posts, instead of creating another back-to-back post.

Last edited by .anshuman : 17th March 2012 at 12:43. Reason: See note in post
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Old 17th March 2012, 09:18   #24
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Default Re: The 2012 Budget & the Indian Car Scene : All you need to know

Thanks GTO for the summary. That was a quick. Though a few members are disappointed with no additional taxation on Diesel cars, I am smiling . Coming to the specific case of a Renault Duster (to be launched), I guess it falls under the Medium-Sized cars (<= 1.5L) and attracts 24% excise duty an increase of 2% from 22%. Am i missing anything else?

On the other note, having a petrol car (Fabia), I am still with a price hike around the corner. This might be the showdown for Pertol cars as we know, unless a good hike on Diesel is on the plate.
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Old 17th March 2012, 09:48   #25
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Default Re: The 2012 Budget & the Indian Car Scene : All you need to know

Sorry for going OT but

If only the 2G auction had been conducted with integrity, we would have been able to avoid all these increases

How ironic that a few make tons money abusing their position and the rest like us have to pay for it!

Cheers,
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Old 17th March 2012, 10:17   #26
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Default Re: The 2012 Budget & the Indian Car Scene : All you need to know

*UPDATE*

Reactions from Industry Leaders have been added to Post No.4.
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Old 17th March 2012, 10:26   #27
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Default Re: The 2012 Budget & the Indian Car Scene : All you need to know

Quote:
Originally Posted by anjan_c2007 View Post
But there is a recategorisation now that puts the 1.6 L sedans like the old Ford Fiesta, Hyundai Verna ,VW Vento, Skoda Rapid & Maruti SX4 (petrol) fall in the 27% excise bracket. Sedans like the Honda City & new Ford Fiesta with 1.5L engines get the excise advantage.
If this is indeed true, it's really sad that govt. can allow such discriminating rules to be drafted that favour one set of manufacturers over another. I think a correct way to draft this rule would have been that capacities >1.6 to be taxed more with the assumption that these models would be performance oriented. And the fact that the actual capacities of most the above 1.6L cars are 1598, 1594cc it may just allow them to escape this new clause.
Otherwise, it means that the 1.6L is a dying category and I am going to hold on to my Fiesta 1.6 as pretty soon you'll find it tough to get a decent affordable 1.6 in the market.
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Old 17th March 2012, 10:26   #28
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Default Re: The 2012 Budget & the Indian Car Scene : All you need to know

I might be sounding contrarily but i sort-of support these increase in Service and Excise tax and decrease in personal Income tax.

Developing economies which have abundance of Black money have realized that the only way to get some sort of taxes form folks who otherwise do not pay taxes is to get them by consumption based taxation rather then Income based taxation, as even a black money holder will be a consumer of goods and services. So in short the more you consume the more you pay tax.

Right of wrong, this is really up for debate.
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Old 17th March 2012, 11:13   #29
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Default Re: The 2012 Budget & the Indian Car Scene : All you need to know

Quote:
Originally Posted by tsk1979 View Post
I could never understand the link between engine size and exhaust duty. Hypothetically I can make a 1.4 liter gas guzzler, and pay less duty than a 1.6 liter engine with 50% better fuel economy.
It just shows the IQ of the people actually making this budget. The world has moved on, sadly, this country cannot get its head around the fact that with no public transport infrastructure in place, a car is no longer a luxury, its a necessity!
Coming to that, I believe there are no clear standards on power/technicality by which cars can be categorized. The only way with which these cars can be truly classified could be based on their cost. Like its been pointed out in one of the previous posts, a Polo 1.6 and the E-class is going to fall under the same category, so if they are categorized based on the 'factory cost' of the car, they will fall into the classes to which they truly belong. But if such a change is to be brought, I'm sure the manufacturers are going to fool with the costs to escape from the tax axe.

Quote:
Originally Posted by mayankjha1806 View Post
I might be sounding contrarily but i sort-of support these increase in Service and Excise tax and decrease in personal Income tax.

Developing economies which have abundance of Black money have realized that the only way to get some sort of taxes form folks who otherwise do not pay taxes is to get them by consumption based taxation rather then Income based taxation, as even a black money holder will be a consumer of goods and services. So in short the more you consume the more you pay tax.

Right of wrong, this is really up for debate.
I want to agree with my heart and disagree with my brain. Or is it the other way around?
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Old 17th March 2012, 12:18   #30
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Quote:
Originally Posted by mayankjha1806 View Post
Developing economies which have abundance of Black money have realized that the only way to get some sort of taxes form folks who otherwise do not pay taxes is to get them by consumption based taxation rather then Income based taxation, as even a black money holder will be a consumer of goods and services. So in short the more you consume the more you pay tax.

Right of wrong, this is really up for debate.
In principle yes, but then lifestyle of these "guys with black" money is does not really help here, even small time actresses, netas's kin and CEO types shop outside Inida, check any regular newspaper and you will find someone shopping in Singaore, Dubai etc for the luxury good! The Rich do not shop in India its only the "trying to get rich" who do it, and to tax them is not really great, you can not make more tax $ from increasing tax on Soap and Shampoo :-) only for the rich!
I am not sure if that indirect way of taxing will really help any black $$s back to the government. Just my thoughts!
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