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Old 24th April 2017, 23:54   #76
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Default Re: Tax on Tax? Road tax should be calculated on ex-factory price (not ex-showroom)!

Dear Friends,

Our PIL on LTT on VAT was listed today at Court Hall No 1. The counsel for the State sought for an additional time of 6 weeks to file their statement of objections to the writ petition. The Court has granted the State a period of two weeks after court vacations within which their Statement of Objections are to be filed.

Please note that the High Court of Karnataka has its summer vacations for a period of about 4 weeks in the month of May and the aforesaid period of two weeks would commence only thereafter.

I will keep you all updated once the objections are filed.

Waseem.
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Old 25th April 2017, 20:44   #77
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Default Re: Tax on Tax? Road tax should be calculated on ex-factory price (not ex-showroom)!

Waseem, will your case become obsolete with the introduction of GST? I believe GST gets rid of this
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Old 1st July 2017, 00:16   #78
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Default Re: Tax on Tax? Road tax should be calculated on ex-factory price (not ex-showroom)!

Dear Friends,

Our PIL (LTT on VAT) was heard today at the Honorable High Court of Karnataka.

Govt Of Karnataka sought some time to file their objections to the writ petition. The Court was pleased to grant them a period of four weeks and accordingly adjourned the matter.

We will move a memo if The Govt Of Karnataka does not file objections in next 4 weeks.

I will keep you all updated on the next hearing

Waseem.
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Old 1st July 2017, 06:33   #79
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Originally Posted by sanchari View Post
Waseem, will your case become obsolete with the introduction of GST? I believe GST gets rid of this
Not necessarily. Road tax will still be on ex-showroom prices which includes GST.

Road tax only becomes obsolete when it is subsumed into GST which may not happen soon.
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Old 1st July 2017, 15:35   #80
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Originally Posted by sanchari View Post
Waseem, will your case become obsolete with the introduction of GST? I believe GST gets rid of this
If court times in our favor, the state might have to refund the extra cash collected. So in my opinion, the case is still valid.
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Old 1st July 2017, 23:02   #81
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Default Re: Tax on Tax? Road tax should be calculated on ex-factory price (not ex-showroom)!

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Originally Posted by sanchari View Post
Waseem, will your case become obsolete with the introduction of GST? I believe GST gets rid of this
We will soon file a rejoinder to our petition stating that GST has replaced VAT.We may now have to make central government as respondent as well.

Waseem.....
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Old 2nd July 2017, 03:08   #82
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Originally Posted by SILVERWOOD View Post
We may now have to make central government as respondent as well.

Waseem.....
The GST has indeed paved way for the opportunity of including the central government as a respondent. This will add more teeth to this case as any positive outcome might be considered legally binding for the other states as well.

Thanks Waseem for the wonderful service to the community and wish you good luck.

Thanks,
Satheesh

Last edited by noopster : 2nd July 2017 at 11:48. Reason: Fixed smiley
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Old 2nd July 2017, 08:41   #83
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Default Re: Tax on Tax? Road tax should be calculated on ex-factory price (not ex-showroom)!

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Originally Posted by sanchari View Post
Waseem, will your case become obsolete with the introduction of GST? I believe GST gets rid of this
Not at all. States like Tamil Nadu explicitly say that life time road tax will be paid on the cost of the vehicle which is nothing but the ex showroom price. So even post GST, some state governments will calculate road tax on the ex showroom price (which will ideally be sale price of the car + Central GST + State GST.)
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Old 2nd July 2017, 10:51   #84
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Default Re: Tax on Tax? Road tax should be calculated on ex-factory price (not ex-showroom)!

In the UK VAT & SCT used to be computed on the list price and not the actual sale price. The latter was often significantly lower. So some decision is required here.
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Old 3rd July 2017, 18:30   #85
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Default Re: Tax on Tax? Road tax should be calculated on ex-factory price (not ex-showroom)!

Dear Friends,

This what our counsel has to say on filing a rejoinder to our petition and making central govt a respondent.

(Until the section is amended, we don’t need to amend the petition.We cannot make central government a party because this is a state act and the state government is collecting the tax under challenge.)

Waseem.
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Old 7th July 2017, 03:10   #86
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Originally Posted by SILVERWOOD View Post
We cannot make central government a party because this is a state act
Yes, It's unfortunate that the vehicle tax hasn't been included within GST and today I read the news on Govt notification on the Items kept outside of GST, reiterating this taxation stays as a State revenue. So we can't add central govt in this case.
Having said that, in the event of a positive outcome, it still will have a bearing on other states which follow, more or less, the same tax mechanism with differing % numbers.
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Old 29th July 2017, 06:59   #87
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Default Re: Tax on Tax? Road tax should be calculated on ex-factory price (not ex-showroom)!

I had booked a Baleno Alpha CVT yesterday in Chennai and was issued the attached booking confirmation receipt. If you see the price mentioned, the cost of the car without GST is ₹6,58,810. The GST for this price (at the rate of 29%) is ₹1,91,055, thus leading to an ex showroom price of ₹8,49,865. Now TN calculates life time road tax on the ex showroom price and not the actual cost of the car without GST, due to which I have to shell out an extra ₹19,105 as life time road tax. The Motor Vehicle Act in TN states that the life time road tax will be calculated on the cost of the vehicle (doesn't exactly define cost here), so is ambiguous at best. Now is there anything that I can do to challenge this highly scrupulous way of the life time road tax collection? Is going the legal way the only option?
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Tax on Tax? Road tax should be calculated on ex-factory price (not ex-showroom)!-screenshot_2017072900055701.jpeg  

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Old 29th July 2017, 10:01   #88
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Default Re: Tax on Tax? Road tax should be calculated on ex-factory price (not ex-showroom)!

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... anything that I can do to challenge this highly scrupulous way of the life time road tax collection? Is going the legal way the only option?
That's been the norm. Road taxes are calculated on the ex-showroom price, not ex-factory. RTOs calculate based on prices fed into their systems, and even dealer discounts don't factor into the calculation.

Hypothetically, even if you get a car for half price from a dealer for some reason, you'll still pay tax on the full ex-showroom price listed in RTO systems.

We can only hope Waseem's case sets this nonsense right.
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Old 30th July 2017, 12:39   #89
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Default Re: Tax on Tax? Road tax should be calculated on ex-factory price (not ex-showroom)!

Quote:
Originally Posted by y2ksrs View Post
I have to shell out an extra ₹19,105 as life time road tax. The Motor Vehicle Act in TN states that the life time road tax will be calculated on the cost of the vehicle (doesn't exactly define cost here), so is ambiguous at best.
Quote:
Originally Posted by Chetan_Rao View Post
That's been the norm. Road taxes are calculated on the ex-showroom price, not ex-factory.
The road taxes should be calculated on the ex-factory + Transportation/Handling Charges + Dealer's Sales Commission (Discounts will NOT be considered). This shouldn't be simply calculated on the ex-showroom price which contains the GST taxes which,if calculated, amounts to double taxation.

I'm not sure if this is the norms everywhere across the country or the RTOs decide themselves to suit their whims and fancies. This is really a day light robbery and certainly a contender for a lawsuit if you're willing to fight it out. We'll get some form of Clarity if Waseem's PIL succeeds...
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