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Old 24th May 2006, 18:28   #1
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Default Are car owners being fleeced ??

Interesting Reading of a article in rediff.com -> they have sourced it from Outlook Money


Motor vehicle tax or 'road tax' is collected from buyers directly by the manufacturers or dealers. It is a vast sum of money -- for an upper-end private car, it can run into a lakh. Collected on 'life basis,' the tax is for 10 years or a 'fitness' period of 15 years. After that the car has to be re-registered, and more tax paid. For commercial vehicles, it is higher.

This tax is supposed to be based on the ex-factory manufacturing cost, plus excise duty, sales tax/VAT. Manufacturers are, however, charging buyers on the basis of ex-showroom cost, which is higher. It might still be acceptable, if the higher tax was reaching the government. But is it? Letters to manufacturers, as usual, elicit no response.

And the dealers are unwilling or unable to provide the ex-factory cost.

Meanwhile, an 'off-the-record' chat with an RTO official in Delhi revealed that the rot is much deeper. An amount lower than what is paid by the buyer reaches the RTOs. And often, the tax does not even reach the RTO coffers. The game involves big players, so even manufacturers keep quiet.

It is high time the payment of RTO tax was made directly by the buyer -- through a cheque or demand draft -- to the RTO or other government treasury and a proper receipt issued.

In the interim, do take out the original purchase documents of your car and re-confirm how much road tax was actually paid in your name, on what basis and to whom (I'm grateful to reader Gajendra Singh of Pune for this lead).
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Old 24th May 2006, 18:52   #2
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Hmmm... read that thing a few days back. Wonder how come it has not yet raised the hullabaloo in the media... I mean the way they jump all over each other to cover a scam story.

By the way buddy... you haven't yet updated your location, as I see it. Or is it that you are back in Hyd?!
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Old 24th May 2006, 21:31   #3
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I was under the impression that road tax receipts were given along with ALL cars at delivery. Doesn't the amount shown in the receipts equate to the actual amount paid? From what I've seen in Chevy, Tata and Maruti showrooms, the MVT (I guess 4% in Mumbai; now 7% or so) is quoted specifically, alongwith ex-showroom and other misc. prices. BUT,yes, the biggest difference is between the ex-showroom and ex-factory price; I once managed to see a Optra 1.6's ex-factory price, and guess what, it was 5.2 lacs..! For the record, the car costs about 8.6 on-road, Thane.
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