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Old 5th September 2017, 16:16   #136
a2k
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Default re: GST cess on midsize sedans, SUVs & luxury cars hiked

I have a question regarding the application of cess post the GST council meeting on September 9th. I have paid in full for a Skoda Octavia VRS and the dealer has promised to invoice the car in my name before September 8th. The issue here is since it is a new model it needs RTO approval before I can register the car and this is going to take at least a week from today which is post the GST council price announcement. Will I be attracting the new cess at that time or since it has already been invoiced before the GSL council cess raise I will only pay the old rate that I have paid for.
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Old 5th September 2017, 16:40   #137
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Default re: GST cess on midsize sedans, SUVs & luxury cars hiked

Quote:
Idealer has promised to invoice the car in my name before September 8th. The issue here is since it is a new model it needs RTO approval before I can register the car and this is going to take at least a week from today which is post the GST council price announcement. Will I be attracting the new cess at that time or since it has already been invoiced before the GSL council cess raise I will only pay the old rate that I have paid for.
I am not exactly aware of your state but RTO Taxes have nothing to do with Invoice Prices, worst case they can ask for Road Tax based on new prices post GST cess. Normally dealers can do Sales in transit for the stocks they have not received so you should be good.
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Old 5th September 2017, 17:01   #138
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Default re: GST cess on midsize sedans, SUVs & luxury cars hiked

Quote:
Originally Posted by a2k View Post
I have paid in full for a Skoda Octavia VRS and the dealer has promised to invoice the car in my name before September 8th. The issue here is since it is a new model it needs RTO approval before I can register the car and this is going to take at least a week from today which is post the GST council price announcement.
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Originally Posted by Turbanator View Post
I am not exactly aware of your state but RTO Taxes have nothing to do with Invoice Prices, worst case they can ask for Road Tax based on new prices post GST cess. Normally dealers can do Sales in transit for the stocks they have not received so you should be good.
Once invoiced the GST on sales of the vehicle need not be changed, unless the council decides to apply it back dated. And like mentioned above only the road tax part might get affected. Assuming insurance is also purchased on the invoicing date, if not there would be a minor difference there also.

Coming back to this topic of dilly dallying tax rates, it is not the higher tax for luxury items that is flawed, but rather defining luxury items and then up and down about %. Is it very difficult to make the % increase based on price brackets? Won't it incentivise the car makers to bring out cheaper cars, sell more and Govt rake in more volume of tax?

Crude example:

- Under 5 lakh base price will have minimal or no tax
- 5 to 10 lakhs next bracket
- 10 to 20 lakhs higher
- 20 to 40 lakhs highest
- 40 plus add luxury cess etc

I feel then a honda city will really want to compete with say a Ciaz in pricing.

Quite crude and simple method, but wont this work? Majority of tax paying population would find it acceptable also i feel.

If this is flawed, why can't Govt give it a years time to see how the revenues Vs sales pan out based on what was announced and then make a call, instead of this knee jerk populist move.
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Old 5th September 2017, 17:42   #139
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Default re: GST cess on midsize sedans, SUVs & luxury cars hiked

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Originally Posted by Mindgrinder View Post
My point regarding ola/uber was not about drivers but about how are government does not have a foresight for possible problems it can raise. I remember when Ola/Uber went on strike i used to reach my office in half the time of what i take usually.

Well i am no economist but Indian govt. should learn from Singapore, toughen and make cars super expensive but then Public transport should be made as good before it is implemented. The problem is they are trying to make everyone happy especially the people who are not even adding to the GDP growth.
Government should take concrete steps to make public transport more efficient and there is no doubt about it. However, please understand any effort in in this regard will give results in 5-7 years. That means the credit will be taken by the subsequent government, so why bother. Secondly, politicians so not use public transport and they have no clue about ground reality. So why bother again. Thirdly, those who do not contribute to GDP (though I do not agree with you here), they contribute in votes and that has to be taken care of. Lastly, many politicians own the fleet of buses and cabs. They would not want any reduction in income from such sources. Examples are the blue line buses that were running in Delhi a few years back.

Sooner or later, they will have to take steps to improve public transport. It has to happen otherwise cities will stop functioning.

Disclaimer: I do not support Government's cess proposal on cars at all.
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Old 6th September 2017, 18:23   #140
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Default re: GST cess on midsize sedans, SUVs & luxury cars hiked

Many here seems to mistake taxes as a means to punish the rich. You are wrong. Taxes should only be for generating revenue for the govt. The rich are taxed more only because... well because they can afford it. No point in taxing somebody who have no means to pay it.

If you thought that by increasing taxes automatically increases revenues, you are wrong again. The math is not so simple here. You can't simply double the tax and expect the revenue to double. Everybody spending money on the market is governed by his purchasing power. Most of us buy the car which we can afford the best. If I have 10L to spend on my car purchase, I would still buy a 10L car post tax hike. If the FM really thought that he would see a substantial increase in revenues, he has mistaken.

Which brings us to the previous point again. Higher taxes as a deterrent for people buying luxury vehicles. Tax somebody so much that he is not able to buy that luxury item, that object of his desire. How sadistic.
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Old 6th September 2017, 20:22   #141
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Default re: GST cess on midsize sedans, SUVs & luxury cars hiked

Quote:
Originally Posted by civic-sense View Post
Many here seems to mistake taxes as a means to punish the rich. You are wrong. Taxes should only be for generating revenue for the govt. The rich are taxed more only because... well because they can afford it. No point in taxing somebody who have no means to pay it.
Ok, I respect your opinion so I won't debate it, but couldn't quite get the summary of the post. Here you're saying that the rich should be taxed (rich has many brackets, in this case the goverment is dangerously on the heels of middle and upper-middle class where they're clearly not rich), ok fine, we all understand that those who earn are those who're taxed, but..

Quote:
Which brings us to the previous point again. Higher taxes as deterrent for people buying luxury vehicles. Tax somebody so much that he is not able to buy that luxury item, that object of his desire. How sadistic.
Exactly, you wrote what I wanted to write as well.. so what is the conclusion? Do you support aggressive curbing of spending or do you prefer a more lenient government seeing that money always goes in circles.. the more that is out there to spend the more we all get since the economy is connected.

Punish those who "have resources" goes more like this :



Works in one way, seems absolutely idiotic in another. The effort/education that was involved is a non-factor when it comes to people's success I'd assume.
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Old 6th September 2017, 20:30   #142
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Default re: GST cess on midsize sedans, SUVs & luxury cars hiked

Quote:
Originally Posted by dark.knight View Post
Ok, I respect your opinion so I won't debate it, but couldn't quite get the summary of the post. Here you're saying that the rich should be taxed (rich has many brackets, in this case the goverment is dangerously on the heels of middle and upper-middle class where they're clearly not rich), ok fine, we all understand that those who earn are those who're taxed, but..



Exactly, you wrote what I wanted to write as well.. so what is the conclusion?
I am unhappy that all that verbal diarrhea didn't help.

The crux is:

If higher taxes are supposed to act as a deterrent, then it is unjust.

And if it is to increase tax revenues, then the math is not as simple as what the FM thinks.

Last edited by civic-sense : 6th September 2017 at 20:40.
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Old 6th September 2017, 21:57   #143
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Default re: GST cess on midsize sedans, SUVs & luxury cars hiked

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Originally Posted by civic-sense View Post
If the FM really thought that he would see a substantial increase in revenues, he has mistaken.
I don't think that was the intention. The government is of the view that when essential items (which probably have 0% GST on them) are becoming expensive, then it is absurd that "luxury" items should become cheap.
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Old 7th September 2017, 07:18   #144
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Default re: GST cess on midsize sedans, SUVs & luxury cars hiked

Companies petition government, GSTC to create separate category for mid-sized cars.

Quote:
Carmakers have petitioned the government and the Goods and Services Tax Council to create a separate category for midsized cars and not club them with highend ones that could face a cess of as much as 25% on top of 28% GST. The council will consider the quantum of the cess, currently 15%, to be applied on such motor vehicles at its meeting on September 9.
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Clarity will emerge only after the GST Council meets on September 9 on whether this 10 percentage points increase in cess will be across all categories of vehicles more than 4 metres in length, whether there will be some distinction made based on engine capacity


ET

Last edited by volkman10 : 7th September 2017 at 07:22.
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Old 9th September 2017, 09:23   #145
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Default Re: GST cess on midsize sedans, SUVs & luxury car nos hiked to 25% (a 10% increase)

Quote:
Originally Posted by Jaggu View Post

Crude example:

- Under 5 lakh base price will have minimal or no tax
- 5 to 10 lakhs next bracket
- 10 to 20 lakhs higher
- 20 to 40 lakhs highest
- 40 plus add luxury cess etc

I feel then a honda city will really want to compete with say a Ciaz in pricing.

Quite crude and simple method, but wont this work? Majority of tax paying population would find it acceptable also i feel.

If this is flawed, why can't Govt give it a years time to see how the revenues Vs sales pan out based on what was announced and then make a call, instead of this knee jerk populist move.
I agree with Jaggu Bhai but will common sense prevail for the sake of the common man?

Doubt it. Let's wait and see what's is store for us today
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Old 9th September 2017, 11:24   #146
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Default re: GST cess on midsize sedans, SUVs & luxury cars hiked

GST Council meeting today to discuss the quantum of Cess increase, timing for this increase and gradation of cars to which this increase will be applicable.

Following excerpt from Livemint seems interesting
Quote:
According to an official who spoke on condition of anonymity, 10% is the maximum increase allowed under the ordinance. The official said many in the council may not find a 10% increase in cess on all cars desirable in view of the decline in the economic growth rate to 5.7% in the June quarter of 2017-18 and ahead of the festive season.

Another person informed about the discussions, also speaking on condition of anonymity, said only cars and SUVs priced above Rs. 20 lakh may see an increase of 10% in cess.
Levying Cess on luxury cars defined by ex-showroom value of >20 lakh seems more logical rather than applying it for any and every car >4m length

Also, following is an excerpt from ET
Quote:
he Goods and Services Tax (GST) Council is likely to keep the overall tax incidence on motor vehicles below 50 per cent at its meeting in Hyderabad on Saturday, a move that could rein in price increases
So quantum of increase in cess could be 7% or lower
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Old 9th September 2017, 16:23   #147
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Default re: GST cess on midsize sedans, SUVs & luxury cars hiked

Any update on the issue?

Percentage hike finalised? Date for implementation?

Last edited by a4anurag : 9th September 2017 at 16:26.
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Old 9th September 2017, 17:16   #148
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Default re: GST cess on midsize sedans, SUVs & luxury cars hiked

No updation so far on the cess on "Luxury cars".

Awaiting a briefing by the FM shortly.

Last edited by bb8778 : 9th September 2017 at 17:45. Reason: Spacing
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Old 9th September 2017, 18:41   #149
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Default re: GST cess on midsize sedans, SUVs & luxury cars hiked

Quote:
Originally Posted by a4anurag View Post
Any update on the issue?

Percentage hike finalised? Date for implementation?
Quote:
Originally Posted by bb8778 View Post
No updation so far on the cess on "Luxury cars".

Awaiting a briefing by the FM shortly.
No decision taken on cess hike in today's meeting.
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Old 9th September 2017, 19:26   #150
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Default re: GST cess on midsize sedans, SUVs & luxury cars hiked

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Originally Posted by Nikhs View Post
No decision taken on cess hike in today's meeting.
So have they decided to postpone the decision or what? Any updated details would be more than helpful. Thanks
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