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Old 2nd January 2017, 09:29   #211
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Default Re: Effect of Rs. 500 / 1000 note ban on the Indian car industry

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Originally Posted by volkman10 View Post
Though figures of MS shows a decline in reported dispatches it is as per the plan as the company had shut for ~ 6 days owing to its planned maintenance schedule.
I sometimes wonder is there a limit for Media cells of industries (or for that matter any other fiels) to sugar-coat the facts. AFAIK, MS has been having the 6day shutdown twice every year since long.

In Dec 2015 as well they had one, so the reason for decline of numbers in Dec 2016 is definitely not the shutdown.
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Old 2nd January 2017, 09:29   #212
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Default Re: Effect of Rs. 500 / 1000 note ban on the Indian car industry

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I received this on a WhatsApp automotive group a few days back. I mean WHY would anyone wantedly attract the IT departments scrutiny by buying a car this financial year ?
The news, if legitimate, is absolutely shocking to hear at the very least. The car buying process is one of the most organized and most well documented processes in this country, if not THE most well documented.

All dealers ask for PAN card copy, address of buyer, telephone number etc. There is an ex-showroom price which is absolutely non-negotiable barring for well disclosed offers per month, and fixed road-tax, insurance, accessory charges etc. All of these payments are to be made by cheque only. I'm not sure what kind of haggling goes on for high-worth luxury cars but the typical buying process of a car <30L is as above.

I'm not sure but I keep getting a feeling of dread reading such news, the current trend it seems, is to heavily bash, scrutinize and hang the legitimate tax-payers of the country to "rescue" the poor. Its OK to silently investigate and bring out "irregular" transactions to light but such open declarations of threat only scares the honest even more than they already are. The earners need to spend, PERIOD. Enough of the threats and warnings of stern actions, we the middle class have been beat down suitably over the past 2 months.
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Old 2nd January 2017, 09:58   #213
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Default Re: Effect of Rs. 500 / 1000 note ban on the Indian car industry

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Originally Posted by sgiitk View Post
One major issue has been that loans of cars bought on finance are often paid back in cash. Quite often in under a year as well. I hear this is the main cause of the slow down. Third party cheques is a lesser menace.
Loans would still have the PAN number and hence traceable.

A query, Do they ask for the PAN card when buying a car? Don't remember whether I gave mine when I bought mine
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Old 2nd January 2017, 10:04   #214
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Default Re: Effect of Rs. 500 / 1000 note ban on the Indian car industry

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The car buying process is one of the most organized and most well documented processes in this country, if not THE most well documented... All dealers ask for PAN card copy, address of buyer, telephone number etc... The earners need to spend, PERIOD.
I think you missed the point here. It's not about the car buying process, but about the source of money. Whether the money used for buying a car is legitimately earned i.e. due tax has been paid on that. And based on inputs from a close one in this field, I can conclude that a lot of money in car market is in form of cash and even the money coming in other forms is not completely legitimate.

One of my CA friend had pointed out 5 biggest hoards of black money (there may be few others as well) :
a) Real Estate
b) Gold/ Silver/ Jewellery etc.
c) Cash
d) High Value purchases, like cars
e) Stock Market

The following articles hit the nail on its head :
Indian Express Article
Business Today Article
Quote:
India has just 24.4 lakh tax payers who declared an annual income of over Rs 10 lakh yet 25 lakh new cars, including 35,000 luxury cars, are being bought every year for last five years, a top official said. A nation of over 125 crore people had only 3.65 crore individuals filing their tax returns in the assessment year 2014-15, the official said alluding to a huge number of individuals being outside the tax net.
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Old 2nd January 2017, 10:20   #215
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Default Re: Effect of Rs. 500 / 1000 note ban on the Indian car industry

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Originally Posted by AutoNoob View Post
I think you missed the point here. It's not about the car buying process, but about the source of money.
I did get that point, and thanks for elaborating, however my view remains that as long as vehicles are bought by paying via cheque, its then an assumption that the buyer is paying out of the declared assets which have then come into the bank account as income. As I've said in the previous post, I'm not sure where the cash components are used or how the haggling is done for luxury cars over the 30L barrier, but as far as I know, the dealers in general accept only full cheque.

Also as stated above, the government should silently investigate and take down questionable transactions which are still happening by the hundreds of thousands specially in real-estate and renting "schemes" BUT THAT, they choose to not do anything from what I've seen until now. Issuing gentle and/or strong threats via newspapers or social media is giving them a big-brother society or Orwellian State reputation. One that I strongly condemn.
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Old 2nd January 2017, 10:56   #216
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Default Re: Effect of Rs. 500 / 1000 note ban on the Indian car industry

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Originally Posted by dark.knight View Post
as long as vehicles are bought by paying via cheque, its then an assumption that the buyer is paying out of the declared assets which have then come into the bank account as income.
Not always. Also, AFAIK, still there is no automated system which has common connect between banks and IT database which can flag suspected bank deposits/ balances by comparing with the tax info. Such system is highly needed and might be under discussion. I am not from software domain, but with my limited understanding, I feel that since all banks work on different platforms, to develp a common interface is a tedious task. Also, the scale of data to be processed might also be a big challenge. Till the time such a system is in place, most of the scrutiny has to continue by collating data from various sources, most of that is done with manual interference and based on specific inputs. And, people are smart enought to find ways to game the system.

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specially in real-estate and renting "schemes" BUT THAT, they choose to not do anything from what I've seen until now.
Here also, there is both constitutional and technical challenge. This again is based on my limited understanding :
1. Constitutional : Real Estate/ Property matters are in State List, so Central government can not directly intervene for processes and systems for matters related to this domain eg. making law, record keeping or any other matter.

2. Technical : Same as for the banks, the real estate recond keeping systems and methodology is also different from state to state. Even the official measurement units for land holding are different.

So, States need to work to control the flow of black money in real estate. A common concensus can also be arrived to achieve this. All these are not impossible tasks and can be done if there is WILL. And that's a big WILL. Here, I agree with you, that there is definitely lack of initiative, irrespective of political group. And the reasons are not hard to guess.

Last edited by AutoNoob : 2nd January 2017 at 11:00.
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Old 2nd January 2017, 12:44   #217
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Default Re: Effect of Rs. 500 / 1000 note ban on the Indian car industry

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Originally Posted by slicvic View Post

A query, Do they ask for the PAN card when buying a car? Don't remember whether I gave mine when I bought mine
We bought our car in 2013. Its registered in my Wife's name.
Last week we got a notice asking for the IT Returns to be filed for that year as the car cost more than 5 lakhs.

We had not filed it as we did not feel it was important. Now know better.
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Old 2nd January 2017, 15:00   #218
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Default Re: Effect of Rs. 500 / 1000 note ban on the Indian car industry

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Originally Posted by AutoNoob View Post
The following articles hit the nail on its head :
Indian Express Article
Business Today Article

Quote:
India has just 24.4 lakh tax payers who declared an annual income of over Rs 10 lakh yet 25 lakh new cars, including 35,000 luxury cars, are being bought every year for last five years, a top official said. A nation of over 125 crore people had only 3.65 crore individuals filing their tax returns in the assessment year 2014-15, the official said alluding to a huge number of individuals being outside the tax net.
Come to think of it, it may not be all that out of place for the point on "population of 125 cr and tax returns for only 3.65.

Out of the 125, not every one is in the tax age bracket. There would be children and teens too in that.
Plus, citing my example, in my family of 6, 2 kids, spouse and parents who are senior citizens, only I am the one to file tax returns since my wife stopped working 4 years back, and parents do not fall in the income bracket where tax returns are required to be filed.

But the other part, i.e. only approx 25 lakh returns are for income with 10L+, is quite an eye opener. I am sure majority of there 25 lakh returns must be from salaried individuals. Hence it is quite clear that quite a majority of non-salaried class under-disclose their income on a massive scale.

But there would also be a lot of examples where the cars are booked in the name of the individuals company and not the individuals who actually use them. A lot of people opt for this to help reduce their disclosable taxable income.
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Old 2nd January 2017, 16:26   #219
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Default Re: Effect of Rs. 500 / 1000 note ban on the Indian car industry

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Originally Posted by bblost View Post
We bought our car in 2013. Its registered in my Wife's name.
Last week we got a notice asking for the IT Returns to be filed for that year as the car cost more than 5 lakhs.
We had not filed it as we did not feel it was important. Now know better.
I just hope you don't have anything to do with 'Black'

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Originally Posted by vinit.merchant View Post
Come to think of it, it may not be all that out of place for the point on "population of 125 cr and tax returns for only 3.65... Out of the 125, not every one is in the tax age bracket. There would be children and teens too in that.
As per Census 2011, more than 25 crore males and 24 crore females are in age group 25-59.

Census 2011 - Data File

In this age band, with a conservative estimates, assuming :
a) 70% males and 20% females are working, and
b) of these only 40% males and 20% females are in annual income slabs of 5L and above.

The total turns out to be close to 8 crores. [25x70%x40% + 24x20%x20%]

I may be wrong with percentage assumptions, but surely many more (than 3.65 crore currently) need to be there in tax net. Also, as you mentioned, under-reporting needs to be strictly checked.

Last edited by AutoNoob : 2nd January 2017 at 16:28.
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Old 2nd January 2017, 16:32   #220
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Default Re: Effect of Rs. 500 / 1000 note ban on the Indian car industry

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Originally Posted by AutoNoob View Post
I just hope you don't have anything to do with 'Black'


When we bought our first car in 2006, we bought it in my Wife's name.
The insurance NCB had climbed to 50%. So when we changed our car, it was natural to again buy it in her name.
Using a Car loan which is linked to my Salary account.
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Old 3rd January 2017, 09:14   #221
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Default Re: Effect of Rs. 500 / 1000 note ban on the Indian car industry

Auto companies tread with caution in 2017.

A few months back Auto firms were eyeing double digit growth this calendar year but when reality hit in terms of demonetization and the customers priorities have changed,the car makers now estimate a growth of 4% Y-O-Y in 2017!
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Old 3rd January 2017, 09:22   #222
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Default Re: Effect of Rs. 500 / 1000 note ban on the Indian car industry

A lot of the high end luxury cars are bought by those who earn income from Agriculture. Agricultural income is not taxed. This was originally intended and meant to help the poor farmer.

Typical of a system that doesn't work at all, the real beneficiaries of this are the rich land owners and farmers who enjoy all the benefits of a tax free income and the tax free lifestyle as well. It is only the salaried middle classes that bear the brunt of taxation out here in India and receive precious little for the taxes that they pay!

Demonetization and all this, notwithstanding, our tax regime needs a massive revamp and people need to see ROI on the taxes that they pay.

Last edited by shankar.balan : 3rd January 2017 at 09:24.
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Old 3rd January 2017, 11:19   #223
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Default Re: Effect of Rs. 500 / 1000 note ban on the Indian car industry

Read this article yesterday in TOI. Sales for many, including Maruti, are south of what they would have expected. Few manufacturers like TATAs have seen sales going north. One of the factors is said to be demonetization.

http://timesofindia.indiatimes.com/a...w/56297217.cms

On another note, happy to see TATA showing an increase in sales when even the market leaders have taken a hit.
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Old 3rd January 2017, 11:31   #224
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Default Re: Effect of Rs. 500 / 1000 note ban on the Indian car industry

I honestly don't get the fuss media and companies are creating about lost sales due to the demonetization exercise. First of all it could be very little causation effect, second, even if it is - it just means that their previous numbers were inflated and now the numbers make sense.
Just to further a sectors interest should we not stop the scourge of black money? This is the new normal, people should get used to it now.
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Old 4th January 2017, 09:30   #225
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Default Re: Effect of Rs. 500 / 1000 note ban on the Indian car industry

Demonetization effect or not- Majority Auto Manufactures report a negative growth in Dec 2016 dispatches,
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Source- AutoPunditz

Last edited by volkman10 : 4th January 2017 at 09:33.
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