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Old 31st August 2017, 10:14   #16
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Default re: GST cess on midsize sedans, SUVs & luxury cars hiked

. A part of me agrees that the government should tax the heck out of new cars, as they are one of the few high-value products transacted in white money only (used cars, marriages, jewellery & properties aren't). This is especially important in a country where <5% of citizens pay income tax.

On the other hand, I really get hot under the collar when I see this frequent back & forth. It really wasn't that difficult the first time around - why didn't someone in the government use a calculator then? Rolling out GST rates & then revising them so steeply just sends a bad message to the automotive CEOS & global HQs. We've also seen this stupid indecisiveness with 2.0L diesel engines in North India. Considering how much the auto industry contributes to India in terms of investments, jobs & GDP, it certainly deserves better treatment.

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Originally Posted by octane_100 View Post
With out meaning offense to anybody, one should realize that GST was never about reducing the indirect tax rates.

...I am breathing a little easier today as harassment shall be from only one department going forward
Well said!
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Old 31st August 2017, 10:29   #17
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Default re: GST cess on midsize sedans, SUVs & luxury cars hiked

GST world over is supposed to be simple, transparent and most importantly fair. Our great law makers have messed it up BIG TIME in the name of democracy, appeasement and what not.

Take the case of cars itself, they still are dilly dallying on definition of an ordinary car and luxury car. When the automobile industry have straight forward classifications (hatch, sedan etc), why the heck do they have to reinvent the wheel and come up with stupid definitions. I feel comparing a Verna with any Merc or BMW is total stupidity and fleecing poor citizens.
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Old 31st August 2017, 10:43   #18
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Default re: GST cess on midsize sedans, SUVs & luxury cars hiked

I am still confused
The increase in CESS is applicable to
1) cars> 4m length irrespective of engine capacity (for e.g. Jeep compass petrol ciaz both have engines < 1500 CC)
2) cars> 4m length and engine > 1500cc
3) both 1 and 2

Does not make sense, you can't call city, verna and the likes luxury cars. You need to define luxury properly which is clearly not the case here.
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Old 31st August 2017, 10:50   #19
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Default re: GST cess on midsize sedans, SUVs & luxury cars hiked

Quote:
Originally Posted by GTO View Post
. A part of me agrees that the government should tax the heck out of new cars, as they are one of the few high-value products transacted in white money only (used cars, marriages, jewellery & properties aren't). This is especially important in a country where <5% of citizens pay income tax.
I mean fine if a "poor" guy buys an SUV, tax the hell out of that transaction. It's fishy somebody who does not pay income tax is buying an SUV, but what about those in the < 5%. They have already paid their due share of income tax, why make them look like a fool? Why not provide some tax relief to those who contribute to the exchequer through income tax.
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Old 31st August 2017, 10:54   #20
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Default re: GST cess on midsize sedans, SUVs & luxury cars hiked

I have a slightly different view on this:

We all know that many cars in India are grossly overpriced. Now adding another blanket cess over and above the already high tax rate will only make them even more overpriced. I hope against hope that demand for these cars which are overpriced in the first place actually reduces considerably, thereby forcing the respective manufacturers to correct prices (read reduce).

This way, the margins of the big fat MNC's will now be pocketed by the even bigger and obscenely obese government coffers.
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Old 31st August 2017, 11:00   #21
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Default re: GST cess on midsize sedans, SUVs & luxury cars hiked

Our dream of driving world class cars (on world class roads) will always remain a pipe dream...

In a way, Govt is telling us - you only deserve to drive puny tin cans, your big joint families stuffed into small underpowered cars with luggage tied loosely at the top, so as you may not drive faster than 40KMPH on our non-existent roads. This is for your own safety!
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Old 31st August 2017, 11:10   #22
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Default re: GST cess on midsize sedans, SUVs & luxury cars hiked

We will vent out on the internet, crib about it in office cafeterias, pay up and move on.

We will never sit on a dharna, do a chakka-jam, burn a bus or train and demand a fair treatment. That is the only way your voice reaches the corridors of power. When 3rd party insurance premiums were raised, it was rolled back for commercial vehicles, but not for private cars.

We will never boycott the cars completely, we will keep buying, maybe a segment lower.

Sometimes I wish, we were more united. Maybe form a tax payer union or something and start demanding a fair treatment. I know sounds incredibly stupid and naive, but hey, am not the one who started it!
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Old 31st August 2017, 11:15   #23
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Default re: GST cess on midsize sedans, SUVs & luxury cars hiked

What these MNC brands should do is, learn some business gyan from our cement companies. There's no GST for cement and this was announced very early along with "expert opinions" that the price of cement "set to fall".

The cement companies simply acted as a cartel and raised the price of cement so much so that the price of one packet GST-FREE cement (in Kerala) is actually higher than the price of one packet VATed cement.

On the other hand, what JLR - RR and the big Germans did is simply the opposite. They had their product prices reduced, and passed the GST benefit to the customers. Poor fellas thought this would be appreciated by the government.

And now, I believe the ordinance will now show them the right way to drive in India, for had they been following the cement-guy strategy and decided not to reduce a single Indian rupee, this ordinance and tax wouldn't have been here.

Let me quote our FM: "The object of any taxation policy can't be that its impact is such that a luxury item becomes cheaper and an essential item becomes more expensive" he said.

That's it. When the luxury carmakers reduce their prices, it highlighted the plight of the common man and ever-increasing prices of the essential commodities and food. The FM and his team are unable to reduce or even check the price-rise, partly fuelled by the rise in fuel prices. So, as a desperate measure, he closed that gap.

Guys, don't blame the cement-makers for being robbers. If they decide to become saints tomorrow and pass the GST benefit to you and me, there will be another ordinance, wanna bet?

Source of the FM quote: http://www.thehindu.com/business/Eco...le19586565.ece

Last edited by sandeepmdas : 31st August 2017 at 11:17.
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Old 31st August 2017, 11:31   #24
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Default re: GST cess on midsize sedans, SUVs & luxury cars hiked

Government -

Before GST: "Companies need to pass on the benefits of tax reduction to the consumers"

Now: "Lol. JK! We will not let there be any benefits in the first place!"
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Old 31st August 2017, 11:33   #25
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Default re: GST cess on midsize sedans, SUVs & luxury cars hiked

The Dimwitted-ness of the Govt is really praise worthy.

Why did they take so long to figure out that Luxury vehicles got cheaper?
Why create such a confusion and nuisance in the market?

I am wondering what will happen to buyers who have booked before this increase, and have still not got delivery. Will they be charged earlier rate or revised rate of Cess?
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Old 31st August 2017, 11:38   #26
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Default re: GST cess on midsize sedans, SUVs & luxury cars hiked

Quote:
Originally Posted by abhishek46 View Post
Will they be charged earlier rate or revised rate of Cess?
I am one of these buyers. Hence following the thread closely on what could be the outcome.

Booked a Hyundai Creta top end variant yesterday and waiting period is 30-45 days.

In the customer docket, the terms and conditions mentions one line that says it all:

"Prices at the time of delivery shall be applicable!"

So it is all wait and watch situation.

Last edited by a4anurag : 31st August 2017 at 11:53.
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Old 31st August 2017, 11:39   #27
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Default re: GST cess on midsize sedans, SUVs & luxury cars hiked

Quote:
Originally Posted by sagpatel View Post
I am still confused
The increase in CESS is applicable to
1) cars> 4m length irrespective of engine capacity (for e.g. Jeep compass petrol ciaz both have engines < 1500 CC)
2) cars> 4m length and engine > 1500cc
3) both 1 and 2

Does not make sense, you can't call city, verna and the likes luxury cars. You need to define luxury properly which is clearly not the case here.
I also have the same question.
Specifically, How the MS S-cross 1.3 will be affected because of this cess?
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Old 31st August 2017, 11:42   #28
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Default GST cess on midsize sedans, SUVs & luxury cars hiked to 25% (a 10% increase)

This is disappointing and a learned finance minister saying things and taking such decisions is also disappointing.

He today said that those who can afford a 1 crore car can afford to pay 20 lacs more for it. So why don't you tax cars higher than a crore ? Why are you taxing Honda city and those sort of daily driver cars which have a zero missing.

They have even ruled out reduction in fuel price taxes, which was expected by me as why would government want to give us any benefit ? They only want to fill their coffers and spend on themselves and their needs. No taxes are coming down but only going to go up. While I support this government in matters like fiscal policy, foreign policy but taxation wise I have to agree that GST one nation one or two tax slab policy has failed and we can keep dreaming of a day when cess will be gone but it never will be removed.

Let's continue to work hard and pay more for our dream cars and enjoy them on broken roads. Haha 😂

PS: they have effectively killed the hybrid car and expect us to not use diesel to curb pollution. Such smart people in the government and such smart babu taking such smart decisions. Haha.

Last edited by M00M : 31st August 2017 at 11:44.
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Old 31st August 2017, 11:57   #29
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Default re: GST cess on midsize sedans, SUVs & luxury cars hiked

Quote:
Originally Posted by racer_ash View Post
I have a slightly different view on this:

We all know that many cars in India are grossly overpriced. Now adding another blanket cess over and above the already high tax rate will only make them even more overpriced. I hope against hope that demand for these cars which are overpriced in the first place actually reduces considerably, thereby forcing the respective manufacturers to correct prices (read reduce).

This way, the margins of the big fat MNC's will now be pocketed by the even bigger and obscenely obese government coffers.
Spot on!
This is how the overall design should work in fact. The price should get regulated automatically based on the simple demand-supply rules. Troubles is we are in India. No matter how much you charge, there are always ample amount of people still willing to pay. So it rarely becomes a scenario where the manufacturer has to reduce the price to win customers.

I'm sure that in theory the design of higher GST on luxury items was based on this idea - that the money makers in these businesses will have to cut their profit to share some tax in order to maintain / win customers. Something similar to VISA/MasterCard tie-ups with shops. Win-win for all 3 parties involved.

However - in India for example - builders are ready to keep numerous apartment towers totally vacant without buyers for a whole year without reducing a single rupee on the rate. They know there will be buyers. Once into the 16L or more bracket - we hardly say "NO" to the purchase for another 1L or so getting added. The mind is made up...What the heck, I'll pay another 1L. "I just want that big one right now!" Is what happens...


Quote:
Originally Posted by GTO View Post
. A part of me agrees that the government should tax the heck out of new cars, as they are one of the few high-value products transacted in white money only (used cars, marriages, jewellery & properties aren't). This is especially important in a country where <5% of citizens pay income tax.
A million dollar thought. I dream of a day where everyone wants to actually think like this. Wants to contribute at least a penny in tax to the nation voluntarily before complaining of bad infrastructure. After all if bad decisions are made by authorities, the authorities are not aliens. They are representatives of the people. The state of a nation's growth, infrastructure & wealth is a direct reflection of the citizens.


Quote:
Originally Posted by sagpatel View Post
I am still confused
The increase in CESS is applicable to
1) cars> 4m length irrespective of engine capacity (for e.g. Jeep compass petrol ciaz both have engines < 1500 CC)
2) cars> 4m length and engine > 1500cc
3) both 1 and 2

Does not make sense, you can't call city, verna and the likes luxury cars. You need to define luxury properly which is clearly not the case here.
It is "1". Option "3" in your list is a bit redundant as #1 is a superset of 2.
The cess is applicable flat for all cars above 4m. The "Sub 4m automobile" slab is specifically for cars that have a length below 4m and have a petrol engine < 1.2L or a diesel engine < 1.5L.

You might not call a City/Verna a luxury car. But its your thought as a person who can buy a car mostly. I would agree with you too. However, we are still a tiny % of 1.25 billion people. For a vast majority, they are still luxury cars. I myself will mostly never manage to spare money enough to buy one of these. A "Luxury" is something that is more for convenience than need. Something you can live without & have cheaper alternatives to. You can get a sub-4m car that does most of the things that a City will do. What you get more are creature comforts. They are certainly luxury items.


Quote:
Originally Posted by DriveOnceMore View Post
I also have the same question.
Specifically, How the MS S-cross 1.3 will be affected because of this cess?
The cess I think will be applicable to the S-Cross. Its over 4M. Will be a kind of needless victim in this change. Already less takers, small engine & still higher tax.

Last edited by Reinhard : 31st August 2017 at 12:13.
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Old 31st August 2017, 12:04   #30
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Default re: GST cess on midsize sedans, SUVs & luxury cars hiked

I just want to add one thing here specifically about Mumbai city. The moment GST slabs were announced the Maharashtra government realised that some cars like the Honda City became cheaper in hands of customer. Now how can they let this happen? How can something actually get cheaper? We don't even let vegetables get cheaper. So let's tax them. Anyway no one will object. Let's milk the Mumbaikars.

So they raised the RTO Tax by 2% on new vehicles. This happened on same date as the GST start date that is 1st July so its not a coincidence. Now with the GST Cess the cars will eventually be more expensive then what they were pre GST time. Great isn't it?

Smartest people were the ones that negotiated a discount from dealers before GST came in.

Mod note: Kindly ensure that you proof-read your posts prior to submission. Also, it would be a good idea to use a spell-checker.

Last edited by Rudra Sen : 31st August 2017 at 12:57.
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