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Old 31st August 2017, 14:57   #46
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Default re: GST cess on midsize sedans, SUVs & luxury cars hiked

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Originally Posted by nitinralli View Post
GST, Indian version of GOT (Game of Thrones). Everyone has his own theory

I too was looking for new wheels as my 6 year old XUV is getting old. But now with this new tax slab, i would have to churn out more or go with lower segment car.
I've discussed this with several people recently. They have all decided to either go down a segment, extend the ownership of their cars or buy something pre-owned.

My pre-owned Jetta is now coming up on 6 years of age. I've owned it for almost half that and the itch to replace it is very high. I keep wavering between changing it or keeping it, but, since I won't be upgrading the segment, I might just run the car into the ground.
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Old 31st August 2017, 15:08   #47
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Default re: GST cess on midsize sedans, SUVs & luxury cars hiked

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Originally Posted by Yeldo View Post
That is not double taxation. Double taxation is taxing a taxable event twice. Direct tax is what you pay on income, and indirect tax is what you pay when you spend that income. Both are different.



Individuals too are entitled to tax credits for any direct taxes they suffer on their incomes.
Taxing a taxable event (salary/income) twice (income tax and then indirect taxes like toll tax for example). I guess in literal sense at-least, it is double taxation.

I am not aware of this tax credits being available for individual tax payers.

Coming to the topic, reason for cess on "luxury cars" as the FM said - "we cannot tax the luxury cars to the same level as cheaper ones used by the common public" (that was the jist of his reasoning). By that logic, why not tax cars higher and subsidise the cheaper commuter cars then? Net effect of GST on auto sector has been - commuter class cars either stayed at the same price of became slightly costly, and higher end cars and SUVs became a bit cheaper. Now cheaper is again made pricey, and the already pricey ones at the lower level will continue to be like that.
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Old 31st August 2017, 15:48   #48
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Default re: GST cess on midsize sedans, SUVs & luxury cars hiked

While this issue is certainly worth a big debate & mostly we'll all (me included) agree that the increment in the prices of cars is a bad thing (if someone said car should get costlier on an auto forum, it would be really odd ) - we need to remain a bit pragmatic about this.

Afterall this is a tax. Going as white, traceable money into government kitty. At the end of the day - its for our own nation's use. So we shouldn't feel that we are "robbed" by this tax.

Its human tendency that we cry foul when a tax is applied. Taxes are necessary to run the nation. No second thoughts about it. If the nation's bank account gets fat - it is going to eventually percolate to our own or at least some other citizen's good. Not bad to contribute to it.

We should complain equally to the car makers' arrogance of not reducing the car Ex-showroom prices to tune the OTR price that the consumer has to pay. This is a "CESS" and not a tax that gets applied at source. This can be easily offset by the car-makers. And should be.

We have to be clear about whether the tax itself is wrong OR whether only the way they handled the flip flop is wrong. A cleaner implementation with these cars getting costly as soon as GST was rolled out, would have resulted in a lot less uproar.

[Disclaimer - I have dreamed of a Tata Safari since childhood & thats one of the reasons I still remain employed. And god knows I want it to be cheaper by a few lakhs for me to afford!!]

Last edited by Reinhard : 31st August 2017 at 15:52.
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Old 31st August 2017, 16:05   #49
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Default re: GST cess on midsize sedans, SUVs & luxury cars hiked

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Originally Posted by Reinhard View Post
Afterall this is a tax. Going as white, traceable money into government kitty. At the end of the day - its for our own nation's use. So we shouldn't feel that we are "robbed" by this tax.

Its human tendency that we cry foul when a tax is applied. Taxes are necessary to run the nation. No second thoughts about it. If the nation's bank account gets fat - it is going to eventually percolate to our own or at least some other citizen's good. Not bad to contribute to it.
Nobody deny that tax is a good thing. We are talking about percentages here, and percentages are deceptive. A flat tax of x% on all cars, for example - it would still fetch the Govt more money if someone buys an expensive car, rather than forcing people to buy cheap cars (thereby, getting lesser tax per car in absolute terms).
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Old 31st August 2017, 17:04   #50
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Default re: GST cess on midsize sedans, SUVs & luxury cars hiked



I am basically more worried on the flip-flops more than the tax rates themselves. For any country to progress, the decision making has to be stable and mature. We can discuss on the tax rates till the cows come home, but it will be a futile debate. We can all agree to disagree on the tax rates depending on our leanings.

IMHO, industries and businesses in the long run are not overly bothered on the rates themselves. They will definitely figure out a way to at least survive if not succeed. All they need is clarity and an assurance on the long term nature of any policy, which sadly is lacking in our country for a long time now.
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Old 31st August 2017, 18:32   #51
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Default re: GST cess on midsize sedans, SUVs & luxury cars hiked

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Originally Posted by Reinhard View Post
W
Afterall this is a tax. Going as white, traceable money into government kitty. At the end of the day - its for our own nation's use. So we shouldn't feel that we are "robbed" by this tax.

Its human tendency that we cry foul when a tax is applied. Taxes are necessary to run the nation. No second thoughts about it. If the nation's bank account gets fat - it is going to eventually percolate to our own or at least some other citizen's good. Not bad to contribute to it.
You are right on many points.
However, the common citizen has every right to feel "Robbed" by these Taxes, because in the name of 'Roads' , he gets potholes, stones & river rivaling water logging.

If the Taxes we pay are actually used in full honesty, we would have roads equaling Auto Bahns.
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Old 31st August 2017, 19:04   #52
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Default re: GST cess on midsize sedans, SUVs & luxury cars hiked

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Originally Posted by Reinhard View Post
.....

Afterall this is a tax. Going as white, traceable money into government kitty. At the end of the day - its for our own nation's use. So we shouldn't feel that we are "robbed" by this tax.......

......If the nation's bank account gets fat - it is going to eventually percolate to our own or at least some other citizen's good. Not bad to contribute to it.
I really think the 'pride of being a contributing citizen' wears off over a period of time when none of the benefits reach the person actually footing the bill for them. As it seems, most of what we pay (sometimes reluctantly) seems to end up enriching a few hundred people in a certain legislative building in Delhi, and their counterparts in various states.

Quote:
We should complain equally to the car makers' arrogance of not reducing the car Ex-showroom prices to tune the OTR price that the consumer has to pay. This is a "CESS" and not a tax that gets applied at source. This can be easily offset by the car-makers. And should be.
All of us would love it if car-makers reduced prices in public interest, but it's absolutely absurd to expect a for-profit manufacturer to care about welfare ahead of the govt. whose sole purpose is to do what's best for the citizenry (all of us, not some of us).

Quote:
We have to be clear about whether the tax itself is wrong OR whether only the way they handled the flip flop is wrong. A cleaner implementation with these cars getting costly as soon as GST was rolled out, would have resulted in a lot less uproar.
It's really funny (or it would be, if it wasn't so tragic) that we as a country spent years poking fun at a guy who's actually an economist by profession and responsible for probably the single biggest economic phenomenon in this country, while we're sitting by with an utterly out-of-depth Finance Minister wreaking havoc with constant flip-flops.

Taxes are good, more people need to pay them (more the merrier). Absolutely no arguments from me there.

What I'm not comfortable with is the absolutely lack of accountability, incompetence in formulating and implementing policy, and the expectation that those paying the taxes should just consider it a charitable donation that they never expect to see benefits from.

My duty as a tax-paying citizen doesn't end at paying taxes, it also extends to asking what's being done with those taxes and no, asking that question doesn't make me anti-national. This last bit was a generic comment and not intended as a direct response to your post.

/Rant

Last edited by Chetan_Rao : 31st August 2017 at 19:08.
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Old 31st August 2017, 19:22   #53
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Default re: GST cess on midsize sedans, SUVs & luxury cars hiked

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Originally Posted by Chetan_Rao View Post
I really think the 'pride of being a contributing citizen' wears off over a period of time when none of the benefits reach the person actually footing the bill for them. As it seems, most of what we pay (sometimes reluctantly) seems to end up enriching a few hundred people in a certain legislative building in Delhi, and their counterparts in various states.



All of us would love it if car-makers reduced prices in public interest, but it's absolutely absurd to expect a for-profit manufacturer to care about welfare ahead of the govt. whose sole purpose is to do what's best for the citizenry (all of us, not some of us).
So you want all your benefits to be taken care of by the government and you won't bargain with a profit making business? Remember, we are talking about a luxury item here. We stop going into the showroom & the car price will come down. Why not that?

The businessman is making truckloads of money by selling a car. Government is only charging a tax on it. The bad infrastructure is not created this year. It exists since 70 years. This money being taken now may get used for better projects.
The government's purpose is not to bleed taxes while businesses make money. This way no taxes would feel fair at all.
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Originally Posted by Chetan_Rao View Post
It's really funny (or it would be, if it wasn't so tragic) that we as a country spent years poking fun at a guy who's actually an economist by profession and responsible for probably the single biggest economic phenomenon in this country, while we're sitting by with an utterly out-of-depth Finance Minister wreaking havoc with constant flip-flops.
We all know that most of the times the ministers are there to sign. The real design comes from the administrative services. The good old BBC "Yes Minister" taught us well on those facts. The fun if poked is not for economics but for other factors . And I agree that the current fellow really shouldn't hold any portfolio as he was rejected by people in election!

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Originally Posted by Chetan_Rao View Post
Taxes are good, more people need to pay them (more the merrier). Absolutely no arguments from me there.

What I'm not comfortable with is the absolutely lack of accountability, incompetence in formulating and implementing policy, and the expectation that those paying the taxes should just consider it a charitable donation that they never expect to see benefits from.

My duty as a tax-paying citizen doesn't end at paying taxes, it also extends to asking what's being done with those taxes and no, asking that question doesn't make me anti-national. This last bit was a generic comment and not intended as a direct response to your post.

/Rant
Let's not get too political on an auto forum.

I'll reiterate. I'm not happy with the flip flop. But at the same time, I'm not sad that the luxury cars are going to be costlier. The mess is not the costly car. The mess is they didn't use a simple 20rs calculator before GST rollout.

If we are ready to pay 20 Lakhs for keeping a box of steel on the road while the car maker & dealer all make a big margin on that sale - it is not too bad if the government wants a share in it. The rich get taxed - should get taxed. India has a socialist model & this is how it works.

We must also be cognizant of the good things the GST did in the big picture. Just in the auto spectrum as we are on TBHP -

1. The entry level cars & 2 wheelers are now CHEAPER - makes it that little bit easier for the common man to get a car yeah?

2. The costly big cars get a bit costlier - perhaps to compensate for the tax lost in the above category. Many of the people in my part of the world who own these big cars - do NOT pay any income tax & go on to buy a Fortuner or an Audi. So to my income tax bleeding pockets, it seems fair that they at least pay some other tax more than I do.

Overall - its all just old wine in new bottle of course. VAT was supposed to do the same as what GST is advertised to. Didn't work. GST won't make a big difference for long either. Its an infrastructure & mentality that is going to take a long time to correct sadly.

Don't get me wrong. I'm not a proponent of any side here. Do visit my post on 1st page of the thread too. I'm just putting various angles of the situation for debate.

Last edited by Reinhard : 31st August 2017 at 19:28.
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Old 31st August 2017, 19:24   #54
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Default re: GST cess on midsize sedans, SUVs & luxury cars hiked

I bought a Ciaz Delta DDis in June and after this price correction, the same car will be approx 2L expensive than the price I bought it for.

I am all for paying taxes but considering that the taxes we pay and the facilities we get there is a huge gap. Let us even consider that the government uses the funds generated from the sale of automobiles and the road tax to develop roads. Are the roads in good shape even for 6 months? This when we also pay huge taxes to run the car while refueling, buying insurance, crossing toll nakas. The only problem is accountability and not the issue with paying a reasonable amount of tax. In the current set up, we are paying a huge amount for a relatively less significant growth. One of the best examples of the same is Mumbai Pune Expressway, which is under toll ever since, now extended till 2025 but the road is not anywhere near perfection. Hope we really usher in the GST regime where octroi posts are no more visible, but i do hope we have one tax and no extra cess by the state as per their wish.
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Old 31st August 2017, 19:30   #55
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Default re: GST cess on midsize sedans, SUVs & luxury cars hiked

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Originally Posted by abhishek46 View Post
However, the common citizen has every right to feel "Robbed" by these Taxes, because in the name of 'Roads' , he gets potholes, stones & river rivaling water logging.
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Originally Posted by Chetan_Rao View Post
My duty as a tax-paying citizen doesn't end at paying taxes, it also extends to asking what's being done with those taxes and no, asking that question doesn't make me anti-national. This last bit was a generic comment and not intended as a direct response to your post.
I'm completely siding with both you guys and I'd have written a post on similar lines but I guess these two posts pretty much sum it up.

However, I still believe that the public has with them, tremendous power. I believe that I as a taxpaying citizen am the true ruler of the country and I am second to none.. this gives me the power to choose while still following all the rules. The workings of this nation goes something like this :

Citizens/consumers/voters --> Companies/lobbyists/corporates --> Bureaucrats/government/policy makers --> Back to start.

One pressure move by any of the 3 sections of modern society will squeeze the other 2. So far most moves have companies+governments putting the squeeze on us. Time for the tables to turn. Demand has to fall and it has to fall by a united front put on by the consumers.. watch the lobbyists go into a tizzy and squeeze the policy makers to not only retract such moves but to also make it even more easier.

Its a 3-way game of poker.. we blink we lose. Hold the cards close to the chest and play the waiting game and literally no force in existence will dare to play more. I'm not complaining about such moves, I understand in today's society everything is at a premium and the only complaint I'll even have is that I'm not making enough money fit for survival today, however there is a nasty movement by the enforcers that today, luxury is a crime, be it technology, cars, accessories, homes, vacations, anything.. a free and open society must accept that the rewards for most honest people who've worked hard will include small luxurious indulgences now and then and not simply play off the popular opinion that whenever someone splurges > chori ka maal hai (its an acquisition of theft). I repeat, I'm neutral with this price rise, things cost what they cost.. but the reason for such price rise, that is a bit illogical.
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Old 31st August 2017, 19:43   #56
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Default re: GST cess on midsize sedans, SUVs & luxury cars hiked

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So you want all your benefits to be taken care of by the government and you won't bargain with a profit making business? .......
I should rephrase. I believe in accountability. I can easily NOT go to a manufacturer who isn't giving me bang for my buck, can't do the same to the govt. (whatever flavor it may be), can I?

Also, the qualifying bit of my comment was that the govt. works for me (the citizen, not me the person ) and is expected to do what's best for me (the citizen). In the pecking order of who I hold accountable for creating financial misery, govt. is the first entry any given day.

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Let's not get too political on an auto forum.
I'd say the same, but it's often impossible to critique (not necessarily criticize) a decision without accounting for the decision-maker. Competent people are needed throughout an organisation, the whole jazz about 'being only as strong as the weakest link' and all that. I'll refrain from further political commentary.

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I'll reiterate. I'm not happy with the flip flop. But at the same time, I'm not sad that the luxury cars are going to be costlier. The mess is not the costly car. The mess is they didn't use a simple 20rs calculator before GST rollout.
No disagreement here.

That said, how you do something is as important (if not more) as what you do. Poison a horse in minor increments and you end up with life-saving anti-venom and a poison-resistant horse. Poison it in one go and you end up with a dead horse.

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So to my income tax bleeding pockets, it seems fair that they at least pay some other tax more than I do.
Gratifying as it seems (and I'm the same bucket as you), it's a very slippery slope because there will always be someone poorer than you & I who's deriving the same satisfaction.

Taxation should be fair to everyone, not a witch-hunt to punish a certain demographic.

Quote:
Don't get me wrong. I'm not a proponent of any side here. Do visit my post on 1st page of the thread too. I'm just putting various angles of the situation for debate.
Not judging you at all. I wouldn't have bothered engaging in debate if I thought you were partisan.

Last edited by Chetan_Rao : 31st August 2017 at 19:49. Reason: formatting for better readability
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Old 31st August 2017, 20:32   #57
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Default re: GST cess on midsize sedans, SUVs & luxury cars hiked

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Originally Posted by Nav-i-gator View Post
Taxing a taxable event (salary/income) twice (income tax and then indirect taxes like toll tax for example). I guess in literal sense at-least, it is double taxation.
No Sir. We pay income tax on what we earn. We pay GST on what we spend. Those are two distinct events.

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I am not aware of this tax credits being available for individual tax payers.
Tax credits are available to any individual to offset any actual taxes suffered on income, like foreign taxes.
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Old 31st August 2017, 20:49   #58
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Default re: GST cess on midsize sedans, SUVs & luxury cars hiked

I would be really surprised if anybody actually thought the favorable tax glitch for these cars would continue. People who bought during this window are smart (or lucky). Yes, we can complain about high taxes in general but this specific topic doesn't have much to enlighten because there is no way cars will see favorable taxes in our country, they are the new cigarettes for taxing. Just go to the shop and pick what suits you, all this tax-timing is needlessly.. well.. taxing.
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Old 31st August 2017, 21:12   #59
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Default re: GST cess on midsize sedans, SUVs & luxury cars hiked

GDP Growth Slides To 5.7%, In June Quarter, Which Is A Three-Year Low

They may have second thoughts seeing the numbers, I don't know how much auto & related ancillaries add to these number but it should be substantial. Instead of milking common salaried taxpayer class and then passing subsidies or waiving off loans, better they encourage more spending. There is a large number of middle and upper middle class in India looking for better cars, houses and everything else.

http://www.ndtv.com/business/gdp-gro...-lateststories

Last edited by Turbanator : 31st August 2017 at 21:19.
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Old 31st August 2017, 22:16   #60
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Default re: GST cess on midsize sedans, SUVs & luxury cars hiked

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Originally Posted by manishkapadia View Post

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?
Octroi has also been abolished, so those guys who live in proper city benefit from the reduction net-net (at least until this GST rise came up). No more seeing fake registrations from the neighbouring towns (Thane/Navi Mumbai).

We've booked a Corolla VL - awaiting delivery before prices go up.

Last edited by manson : 4th September 2017 at 00:21. Reason: Typo.
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