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Old 2nd March 2016, 13:22   #46
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Originally Posted by i74js View Post
Is there no provision for Gift among family members?
Yes, Parents can gift to their children.Tax on gift had long been removed in this case.In case if a Husband is gifting money/car to his wife, i guess the tax will be deducted at the Husband's end.
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Old 2nd March 2016, 13:25   #47
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Originally Posted by drsingh View Post
Maruti is smiling. And so are Maruti's lobbyists.
So agreed! Maruti's network, contacts & influence at the center have played a role in all the hybrid benefits they enjoy.

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Originally Posted by xs2mayank View Post
Agreed that mild hybrid does not make much of difference and might just be a gimmick to increase fuel efficiency and get some tax benefits. But they may act a seed for development of fully hybrid technology where Indian manufacturers are lagging far behind right now.
I don't agree. We are the masters of jugaad. The only thing SHVS benefits will result in is everyone else bringing their own 'mild hybrid' systems. Remember how Mahindra magically lowered the XUV500's ground clearance overnight?

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Originally Posted by autobahnjpr View Post
It needs to be seen how TCS system will work in case the vehicle is bought in the name of a company or an organization. Will they also have to pay tax and claim TCS?
Absolutely. Why not? Companies should also pay TCS.

Quote:
Originally Posted by RoadSurfer View Post
Mild or Mirco, is a hybrid. So any car with this technology will be spared from the new "Infrastructure cess". M&M will benefit the most. I think all M&M vehicles will come with Micro hybrid as standard soon.
I can call a potato a tomato, but that doesn't make the potato a tomato.

Mahindra's micro-hybrid system is nothing but an idling start / stop system.

Quote:
Originally Posted by RJ2285 View Post
Does the Honda City - V MT priced at an ex-showroom 8.95L Mumbai fall under the 4% infrastructure cess as it has a mention of small petrol cars up to 1200cc and diesel cars up to 1500cc.

What about 1500cc petrol engines that fall under 10L ?
It would be awesome if you could please read my opening posts again. It's very clearly explained. Don't intend to be rude at all buddy, & am making a polite request. Such posts really bring no value to forum discussions.

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Originally Posted by chandrda View Post
I was worried during the budget session as the car Industry was asking the Government to scrap cars older than 15 years. I had recently poured over 2.5 lakhs on my close to 13 years Fiat Palio GTX. Nothing that sort of thing happened.
And it never will. At least not universally across India. There's no chance. In a country where car penetration levels are so poor, there are families that can only afford a 20 year old Maruti 800 and it suits their requirements just fine.

Quote:
Originally Posted by adithya.kp View Post
I am surprised they havent absorbed in creta too.
Why would they absorb the tax impact on a car that is sold out for the next 6 months? Demand is clearly exceeding supply.

On the other hand, that's not the case with the Santa Fe. Which is why we see Hyundai taking some of the tax hit.

Quote:
Originally Posted by i74js View Post
I think there should be a way out wherein the TCS can be attributed to the person paying for the car and it can be registered in the name of spouse as Gift.
I sure hope not! Else, every person with black money will ask his 'tax-paying friend' to pay the TCS on his behalf. Will also give rise to a black market where people offer to pay TCS in exchange for $$$.

Quote:
Originally Posted by timuseravan View Post
And is >10lakh really luxury now? Most top end variants of hatches cross that limit nowadays.
In a country where 40 out of 1000 people own cars, yes, million rupee cars are a luxury.

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Originally Posted by Chethan B G View Post
TCS / TDS once collected, HAS to be deposited in the respective account in the following month. Failure to do so is equal to a criminal offense. Dealers will be very careful with this - One cannot rotate funds collected as TCS / TDS.
Don't we still hear of companies that used up the TDS & collected service tax for their own expenses? An example from an excellent article:

Quote:
To add to it, Vasan had failed to deposit with the government tax deducted at source (TDS) of Rs.19.22 crore that it had deducted from the salaries of its employees in 2012.

Last edited by GTO : 2nd March 2016 at 13:44.
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Old 2nd March 2016, 13:56   #48
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Originally Posted by GTO View Post
I can call a potato a tomato, but that doesn't make the potato a tomato.

Mahindra's micro-hybrid system is nothing but an idling start / stop system.[/url]:
Hybridization to electrification roadmap in the automobile industry is something like this;
Micro ---> Mild ---> Hybrid ---> Plug-in Hybrid ---> Electric vehicle.

Mahindra has a micro hybrid system and I agree it is nothing but a start-stop system which only requires a stronger alternator, a better battery and software updation, but it is the also an important milestone in the path towards plug-in hybrid/ electric vehicle. How much (if any) incentive needs to be given to such vehicles is a job that Government of India should do with the help of experts. But to say it is not at all a hybrid will not be correct too, even Mahindra calls it "Mirco Hybrid".

Posting a image which I had used in one of our other thread.
Attached Thumbnails
Budget 2016 & Indian Cars: All you need to know-vehicle-electrification-road-map.jpg  


Last edited by RoadSurfer : 2nd March 2016 at 13:59. Reason: added some details
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Old 2nd March 2016, 14:14   #49
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Originally Posted by GTO View Post
Don't we still hear of companies that used up the TDS & collected service tax for their own expenses? An example from an excellent article:
Having been in the same field, I had heard about it but did not know the details. That was a nice read. Thanks!

There are plenty of tax-evaders out there. Particularly, people like you quoted, who have strong connections, think that they can get away with anything.

In normal circumstances, keeping track of TCS is not very difficult. Even if the dealer is dodging, a simple informed discussion, will put the dealer on track.

There will always be some issues. But I don't think that it will be of a large scale.

Quote: "In Recent past we noticed that department has taken late payment of TDS very seriously and in addition to imposing Interest and Penalty for Late Payment, they also start initiating Criminal Prosecution against those responsible for Deduction and Payment of TDS. Recently and MD of a Hyderabad based company been jailed for TDS payment defaults – Company’s MD Sentenced 3 months rigorous imprisonment for TDS default."

- See more at: http://taxguru.in/income-tax/consequ....za8fcuT4.dpuf
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Old 2nd March 2016, 14:28   #50
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Originally Posted by GTO View Post
In the days leading up to the Budget, the PR machinery of car manufacturers was busy asking for tax concessions, vehicle scrappage schemes and more. "Keep dreaming", the Government said. No one at the center paid attention to their demands. The Government of India proved again that it views cars as big ticket items that it will tax the heck out of. After the FM's session was over, car manufacturers would rather have been ignored, as they were in 2015.
Thanks for this informative post sir. The goverment has treaded the cautious approach of balancing income and expenditure. Having an ambitious target of 3.5% of fiscal deficit is commendable and such target has to be bridged by ensuring the income side of the goverment gets a boost. If my vague memory is right service tax has steadily been increasing from 5%. As per Dr Raja Chelliah committee on Tax Reforms way back in the year 1994, Service tax was charged at a flat rate of 5% till 2003 and there was a revision done in 2003 taking it to flat rate of 8%, which over a period of "cess" has jacked upto now whopping 15% (inclusive of education cess and secondary education cess, swacch bharat cess and now the newly added "Krishi Kalyan Cess"). In a scenario wherein you have paid additional 1% service charge on purchase of luxury cars over Rs 10 lakh and drove the same car to reach a restaurant for dining, your total food bill will get increased by 47.50%. Imagine the current scenario:

Food bill: Rs 1000
Add service tax @ 15%: Rs 150
Add VAT @ 12.50%: Rs 125
Add service charge @ 20%: Rs 200
TOTAL: Rs 1475 (inclusive of Rs 475 paid in taxes). You have already paid an additional amount as cess for your 10 lakh plus car.

I had a word with my Honda SA who informed that CITY prices will be going up by approximately Rs 25,000 and Jazz price shall also go up accordingly. Other manufacurers like Hyundai Motors India Ltd (HMIL) has already increased their price in Chennai thrice since October 2015 and the incoming hike shall be the fourth one.
Maruti with its SHVS technology seems to gain handsomeley by tinkering the engine which powers its main diesel engine cars. The proposed amount of Rs 27000 crore for sprucing up road infrastructure of the country augurs well.

Last edited by GTO : 2nd March 2016 at 16:15. Reason: Trimming quote. Please quote only the relevant bits, thanks
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Old 2nd March 2016, 14:30   #51
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Default Re: Budget 2016 & Indian Cars: All you need to know

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Originally Posted by RoadSurfer View Post
Hybridization to electrification roadmap in the automobile industry is something like this;
Micro ---> Mild ---> Hybrid ---> Plug-in Hybrid ---> Electric vehicle..
By that logic every car is a hybrid because it converts engine power to battery storage which powers the headlight.
A hybrid vehicle is technically define as one where the vehicle is driven by an engine(fuel) as well as an electric motor. Sure you can put in a 1kw electric motor, or a 20kw electric motor, both are hybrids.
But a vehicle which automatically shuts down when in neutral is not a hybrid motor, unless the starter motor is used to drive the wheels.
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Old 2nd March 2016, 15:11   #52
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Default Re: Budget 2016 & Indian Cars: All you need to know

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Originally Posted by GTO View Post


I sure hope not! Else, every person with black money will ask his 'tax-paying friend' to pay the TCS on his behalf. Will also give rise to a black market where people offer to pay TCS in exchange for $$$.


:
GTO, I am only talking about gifts within family. It is permitted under law and is not taxed in most of the cases.

This provision is under 206C, which has been essentially created to bring trading under tax bracket similar to salaries.

Your doubts on people pitching in for one another and generation of black money may not hold good.
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Old 2nd March 2016, 15:38   #53
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Originally Posted by tsk1979 View Post
By that logic every car is a hybrid because it converts engine power to battery storage which powers the headlight.
A hybrid vehicle is technically define as one where the vehicle is driven by an engine(fuel) as well as an electric motor. Sure you can put in a 1kw electric motor, or a 20kw electric motor, both are hybrids.
But a vehicle which automatically shuts down when in neutral is not a hybrid motor, unless the starter motor is used to drive the wheels.
It is not my logic. This is a general terminology for a start-stop system all around the world. Even a search by "Micro-hybrid" on Wikipedia redirects to Start-stop system.
This link from Lexus also talks about micro, mild & full hybrids. http://www.lexus.eu/hybrid/#GoodBetterBest
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Old 2nd March 2016, 15:42   #54
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Originally Posted by RoadSurfer View Post
It is not my logic. This is a general terminology for a start-stop system all around the world. Even a search by "Micro-hybrid" on Wikipedia redirects to Start-stop system.
This link from Lexus also talks about micro, mild & full hybrids. http://www.lexus.eu/hybrid/#GoodBetterBest
Here is what they say
Quote:
lthough not strictly a hybrid (electricity from the battery is not used to propel the car), what is more commonly known as 'Stop-Start' does enable a modest reduction in CO2 emissions and fuel consumption. When the car comes to a halt, the petrol/diesel engine is shut down (at traffic lights, for example) and re-starts only when the driver activates the accelerator. The engine is instantly re-started by the alternator, which is powered by the car's battery which, in turn, receives a small boost charge from energy recouped during braking
This is a classic case of violating the spirit of the law while adhering to the letter. This is the reason it is considered that tax concessions based on technology are useless, they should be based on results. For example, your hybrid car doing 12kmpl may get tax concession as opposed to your next gen gasoline engine doing 25kmpl.

We have to see how the Indian government regulation defines hybrid. Does the law say that as long as you call the tech hybrid it is hybrid?
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Old 2nd March 2016, 15:51   #55
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Originally Posted by tsk1979 View Post
Here is what they say


This is a classic case of violating the spirit of the law while adhering to the letter. This is the reason it is considered that tax concessions based on technology are useless, they should be based on results. For example, your hybrid car doing 12kmpl may get tax concession as opposed to your next gen gasoline engine doing 25kmpl.

We have to see how the Indian government regulation defines hybrid. Does the law say that as long as you call the tech hybrid it is hybrid?
I completely agree with you on the last part of your post. It is Government's job to decided what is a hybrid and how much incentive needs to be given to each type of hybrid. But I don't agree that Mahindra or for that matter any other manufacturer is violating anything here, since this terminology is accepted for a Start-Stop system globally.
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Old 2nd March 2016, 16:07   #56
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Originally Posted by RoadSurfer View Post
But I don't agree that Mahindra or for that matter any other manufacturer is violating anything here, since this terminology is accepted for a Start-Stop system globally.
I can start a company, and call a diesel engine a warp drive. But its not a warp drive, right. Standards and technology naming are not decided by marketing drones of companies. They are decided by organizations which have legitimate government backing. For example, IEEE or ISO etc.,

Even the Wikipedia page which says "Start-stop" is micro hybrid points to a "dead link".

However, when you come to governments, they clearly define hybrids as having a hybrid powertrain.

If start-stop was considered hybrid, then the USA government would not have had this document
https://www.irs.gov/pub/irs-drop/n-06-09.pdf

Copy paste
Quote:
New Qualified Hybrid Motor Vehicles
. A certification relating to
a new qualified hybrid motor v
ehicle must also contain--
(a) A statement that the mo
tor vehicle draws propulsion
energy from onboard source
s of stored energy that
are both an internal
combustion or heat engine using cons
umable fuel, and a rechargeable energy
9
storage system;
(b) A copy of the certificate that the motor vehicle meets or
exceeds the equivalent qualifying California low emission vehicle standard under
§ 243(e)(2) of the Clean Air Act fo
r that make and model year; and
(c) Evidence that the maximum power available from the
rechargeable energy storage system during a standard 10 second pulse power
or equivalent test is at least 4 percent
of the sum of the power and the SAE net
power of the internal combustion or heat engine;
If you look at the (c), it also says that the you have to make atleast 4% of the total power. So you cannot have a 1KW motor for a 100KW car.

So Lexus or Toyota or Mahindra can call it micro-hybrid, warp drive, steam engine, bullock cart.... and burn down the entire amazon rain-forest to print pamphlets certifying those, it still will not make it what it is not.

I am unable to find what the Indian law considers an hybrid, because the type of documents clearly outlining what is a hybrid available for USA is not available here. Maybe an RTI can help in deciding, whether I can put a battery powered fan in a car and call it hybrid since the fan will push air out of rear and propel the car, right even if its microscopic propulsion.
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Old 2nd March 2016, 16:19   #57
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Guys, lets gets back on track with the Budget 2016. Hybrids & non-hybrids can be discussed in their own thread.

Thanks!
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Old 2nd March 2016, 16:40   #58
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Originally Posted by MDED View Post
Food bill: Rs 1000
Add service tax @ 15%: Rs 150
Add VAT @ 12.50%: Rs 125
Add service charge @ 20%: Rs 200
TOTAL: Rs 1475 (inclusive of Rs 475 paid in taxes). You have already paid an additional amount as cess for your 10 lakh plus car.
Please don't put out such off-hand and largely incorrect calculations.

Only a portion of your food bill gets taxed for Service. 15% is NOT taxed on the full F&B amount.

Similarly 12.5% VAT is also NOT applicable on the full F&B amount. Such dual taxation does not exist that openly.

First we subject ourselves to these incorrect calculations and then whine about how the government is robbing us of hard earned money.

I have a recent bill from Westin Hyd, all amount charged under taxes is around 15% of the total cost of food consumed.

How will it suddenly turn to 47%?

Similarly, lets not just add 1%/4% to OTR values of cars?

Not related to the quote--

If they are as concerned about the industry - why dont they pass on benefit of depreciation to the consumers - especially for golden-oldy products like Santro; and compete on prices? Rather, the dealers run cartels limiting discounts and benefits.

Last edited by rlakhanpal : 2nd March 2016 at 16:45. Reason: Rephrased last point for relevance
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Old 2nd March 2016, 19:59   #59
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Originally Posted by GTO View Post
Other Highlights of the 2016 Budget:
  • The FM said that private players will be permitted to enter the road transport sector. This could mean private companies operating public transport buses, thereby improving the overall competitiveness & efficiency of the sector. Further, the end of 'permit raj' where bus operators have to procure a permit for each route they ply on is welcomed. With the blessings of individual states, private bus operators could freely run on inter & intra state routes.
While the rest of the auto industry started whining, Dr. Pawan Goenka - Executive Director, M&M - aptly summed it up .
Very good point GTO. Privately managed mass-transport is exactly what India needs now. Over the last 60 years many state governments have tried to run public transport system; but most of them have failed badly. Governments can't run these services efficiently. They can't be harsh on their non-performing employees because that will enrage them. They can't increase the fare because that will displease the voters. They can't go up against the private lobby. Many of the state owned public carriers are making huge losses every year. So much of taxpayer's money going in the drain. So the best solution seems to be accepting the truth and make way to the private players. An efficient mass transport may also reduce the traffic to certain extent and connect the remote villages with the main cities, thereby contributing significantly to the economy.
Good to see that the present Government is thinking about the improvement of transport system in the country.
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Old 2nd March 2016, 22:22   #60
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Default Re: Budget 2016 & Indian Cars: All you need to know

Am in the market for the A4 or the 320D (most likely the 320 ! ;-) and both have said if I book in 1 or 2 days time they will bill me on then older rate. As such have given a booking check to the beemer guys, just to keep him hooked at the older rate.

Suspect it is just an excuse to give a discount.

Last edited by GTO : 3rd March 2016 at 10:10. Reason: Please avoid typing with excessive dots.........like................this. Thanks
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