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Old 2nd September 2017, 22:44   #91
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Default re: GST cess on midsize sedans, SUVs & luxury cars hiked

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Originally Posted by gksunil View Post
... aren't the best roads in our country built on loans and then re payed through tolls? So what are we paying the road taxes for?! Only state highways?
Tolls cover only a portion of such projects. Public money is almost always involved, through viability gap funding, land acquisition, etc. And most loans raised from development finance agencies or as special infrastructure bonds are guaranteed by the government also.

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Originally Posted by Par_neon View Post
And of course if in future the framework itself is amended to incorporate differential taxation on a single commodity...
A reply for your kind question would involve too much dreary economics.

Such a system would have a negative effect in total tax revenue, and would defeat the whole purpose of a progressive direct tax system.

If different tax is levied on a single item, then two different people, having two different levels of income, buying that item will see their final tax burden getting inverted. The lower rate given at the upper band of the price would negate the higher income tax that the high earner among them suffered. So the high earner ends up paying less total tax.

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Old 2nd September 2017, 23:07   #92
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Default re: GST cess on midsize sedans, SUVs & luxury cars hiked

Salaried employee is like a sitting duck as far as taxes are concerned. You have to pay tax when you earn(in the form of TDS) and pay more when you spend(GST). BTW, I came across this video where Sadhguru is sharing his opinion on taxes which I really liked (see from 16:53 till 20:56).

Last edited by ksaurabh21 : 2nd September 2017 at 23:13.
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Old 3rd September 2017, 00:16   #93
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Default re: GST cess on midsize sedans, SUVs & luxury cars hiked

Would like to add my two cents here, all this taxation is frankly affecting one section of society a bit too much. Income tax, GST, tolls etc but I can't see that money being utilised anywhere! Forget building bullet trains, these guys can't even build roads without potholes. The main reason is no accountability - no penalties for anything going bad. There should be a performance based penalty - one pothole, impose xx,xxx amount penalty!

This will all lead to a rise in cash transactions. It's a win for both the producer and consumer. Agreed that you can't buy cars in cash, but that day won't be far.

I'm already seeing a rise in cash transactions, the same folks who were the first to adopt Paytm, card machines etc today are reluctant to accept cards. The government can only do this for so long.

I think it's time the citizens rise up and start voting for those who actually are qualified to do the job. Funnily, you need a graduate degree to work in most places except as a politician !
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Old 3rd September 2017, 01:12   #94
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Default re: GST cess on midsize sedans, SUVs & luxury cars hiked

Great ! . The government has corrected this huge mistake of reducing the tax on luxury cars and SUVs. When the prices for those Porsches and Pajeros came down post GST, i was wondering what is wrong with this government. For me, they are sane now. In my opinion, anything beyond a small hatchback should be heavily taxed in this country. We should discourage citizens from buying cars . It is not a country for cars. We do not have the roads nor we have any sane drivers behind the wheels.
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Old 3rd September 2017, 01:31   #95
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Default re: GST cess on midsize sedans, SUVs & luxury cars hiked

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Originally Posted by krishnakarthik1 View Post
We don't have to do any of those. All we have to do is stop buying cars till the policies are transparent, roads and infrastructure are improved.

We have to start a thread where every member who wanted to buy a new car shares the details about the cancellation of his booking or his decision to not buy a car because of the existing bad policies.

How many members do we have? How many times can we all share the thread on all our social media platforms? Lets share every post. Will our voices not be heard? Imagine.

I am ready to start by setting an example and cancelling my xta booking. Can we all do this?
Sorry for the OT:

It is already happening. That's why you see the dip in the latest financial numbers (GDP etc). People are cutting their expenses, stoping discretionary spending. If you can't reduce the direct tax, reduce the indirect ones. Not just cars, stop buying anything which is not an absolute necessity. I have shelved my plans to go for a new AT hatch, will stick to my 12+ year old hatch for maybe a few more years. Might have bought some new appliances, but took the trouble and got the older units repaired instead. Downgraded all my mobile/broadband/DTH plans to the bare minimum - essentially cut out the excess that was not being utilized. Since I have the option, I work remotely at least a few days every week, reduces my petrol bills.

Now all this didn't happen overnight, but over a few months. I can see substantial savings overall and as a percentage, the tax out flow has also certainly reduced. I am trying to do my bit, if everybody started doing the same, it would become evident pretty soon.

Might sound extreme, but like I said earlier, when you have an unelected lawyer who is in charge of finances, what's the way out!
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Old 3rd September 2017, 01:42   #96
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Does anyone know when is the cess being implemented? From what I understand there's a meeting on the 9th of September when they will decide when to implement the cess. So I feel it should not be implemented before the 15th of September or maybe 1st of October. Is my reasoning correct? Asking this because my cousin is waiting for his jeep compass and wants it before the cess in implemented. If this is true he can wait for the car or else might go in for the Corolla. Thanks in advance.
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Old 3rd September 2017, 02:46   #97
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Default re: GST cess on midsize sedans, SUVs & luxury cars hiked

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Originally Posted by blackwasp View Post
Would like to add my two cents here, all this taxation is frankly affecting one section of society a bit too much. Income tax, GST, tolls etc but I can't see that money being utilised anywhere! Forget building bullet trains, these guys can't even build roads without potholes. The main reason is no accountability - no penalties for anything going bad. There should be a performance based penalty - one pothole, impose xx,xxx amount penalty!
Absolutely, that's the whole point. Nobody knows what exactly happens to our tax money. Zero transparency and we citizens are expected to just follow the lead, with our eyes and brains shut.

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This will all lead to a rise in cash transactions. It's a win for both the producer and consumer.
Sorry, didn't get it. How would it increase cash transactions?

Quote:
I'm already seeing a rise in cash transactions, the same folks who were the first to adopt Paytm, card machines etc today are reluctant to accept cards. The government can only do this for so long.
Spot on. Never realized that. No wait, most of local stores here now have stopped/accepting Paytm. And the "minimum payment required" condition for card transactions has come back. Yes, people sure are going back to cash transactions.

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We should discourage citizens from buying cars . It is not a country for cars. We do not have the roads nor we have any sane drivers behind the wheels.
Well said . And I laughed really hard reading it.
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Old 3rd September 2017, 08:38   #98
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Default re: GST cess on midsize sedans, SUVs & luxury cars hiked

Quote:
Originally Posted by spyder_p8 View Post
The government has corrected this huge mistake of reducing the tax on luxury cars and SUVs. When the prices for those Porsches and Pajeros came down post GST, i was wondering what is wrong with this government. For me, they are sane now. In my opinion, anything beyond a small hatchback should be heavily taxed in this country.
You are right. Since almost all members here own cars, we start thinking that we are the common man of India and rail against the high taxes. The truth is only 2% of Indians own cars. If you take a family (of size 4), then you could say 8% of families in India own cars. That's it. The remaining 92% families in India do not own cars. The families that can own midsize cars, SUVs could be less than 1%. Consider how many A/B segment cars are sold every month, compared to rest of the segment.

Any democratic government makes rules based on what benefits the majority, and not the tiny minority. So you can't expect the tax regime to be kind to this <1% people who can afford nice cars. That is how an government economist would view it and make policy.
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Old 3rd September 2017, 08:57   #99
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Default re: GST cess on midsize sedans, SUVs & luxury cars hiked

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Originally Posted by blackwasp View Post
This will all lead to a rise in cash transactions. It's a win for both the producer and consumer. Agreed that you can't buy cars in cash, but that day won't be far.
It'll never be possible to buy a new car with even part cash, because there are too many checks and balances in the system. The factory bills it, the showroom bills it and the buyer has to produce a multiple cards to prove his identity before buying (PAN, Voter ID etc) not to mention flat rates across India. I know for a fact that cash is king in even UBER cabs today (many drivers have spoken about it and they too prefer it) and hotels - of course. However demand is down all across the economy today, a hotel where I normally have lunch at during office hours usually sees about 40-50 people, today its down to 15-20 at best.. the reason is that not many people wish to spend about Rs.100-120 for lunch these days.

I think used car sales might pick up due to these conditions.. I myself have been offered about 2 cars with certain conditions :

- BMW 320d @ about 19L (slightly negotiable) with certain cash component.
- BMW X1 @ about 18L nego subject to cash component.

Cash is seen as pure evil these days but look at how things work.. aren't even luxury car owners insisting on a small portion of cash for sale? It makes the deal sweeter for the buyer as well during negotiation. Not saying that I wanted it that way because I have no cash plus the reliability factor of used cars scared me straight, hence I dropped both and I will go ahead with a new car of a lesser brand.. but lets unveil the 5000 kg elephant in the room - cash will survive until its abolished and cash was legal tender until a year ago until it became the "manufactured" evil of today.. guess what the poor people have suffered the most in this melee.

Used cars make tremendous sense today for those with a budget limitation and a limitless aspiration.. plus more good is being done to the environment by re-using something till its intended life-cycle. Yes we aren't able to overcome certain mental blocks like it being pre-owned and not smelling like brand new.. even I'm not able to look past it but when one overcomes those illogical things it does make sense. Good luck finding a great deal without a cash component though (unless its company owned).
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Old 3rd September 2017, 10:38   #100
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Default re: GST cess on midsize sedans, SUVs & luxury cars hiked

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Originally Posted by Samurai View Post
Any democratic government makes rules based on what benefits the majority, and not the tiny minority. So you can't expect the tax regime to be kind to this <1% people who can afford nice cars. That is how an government economist would view it and make policy.
So when will that majority get into that tiny minority? When the majority becomes like the current minority we will see economic growth. We will see better roads. Getting hit by a truck at 30 kmph in a alto lxi is any day better than getting hit on an activa.

Frankly, not many here would be bothered with the 10% increase because majority are emi buyers. That 10% would increase the emi by say a 1000 but its the lack of clarity, the tughlaq behaviour, the dumb demonetization and now this no clarity gst rules.

Mod Note: Avoid political references (Rule#13).

Last edited by Samurai : 3rd September 2017 at 10:59. Reason: Removed political comments.
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Old 3rd September 2017, 11:02   #101
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Default re: GST cess on midsize sedans, SUVs & luxury cars hiked

I, for one, do not find anything incorrect or wrong in this proposed increase in the CESS. The Government is just trying to offset the reduction caused in the income from one source (Works Contracts rate reduced from 18 to 12%) by an increase in the other.

As has been rightly pointed out by Samurai, the percentage of people buying these big SUVs or luxury sedans etc, are very very less in number. And they should not be really affected by this rise in price.
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Old 3rd September 2017, 11:13   #102
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Default re: GST cess on midsize sedans, SUVs & luxury cars hiked

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The truth is only 2% of Indians own cars. If you take a family (of size 4), then you could say 8% of families in India own cars. That's it. The remaining 92% families in India do not own cars.
Correct, but I am sure people aspiring to own a Car will be very high. Auto & ancillaries contribute much higher than anything else to GDP/ growth of any country. I still believe Auto sector has a great future given the aspirational nature of the product, and Government should actually encourage this segment. If Toyota or Mahindra produce more SUV, everyone down to the factory workers and their families is going to get benefited and when they get money all others in society gets a part. So to improve or create Jobs, the Auto segment is one of easiest where you don't need much efforts to increase demand. And by changing such taxes you are not doing good for the people down in the food chain.


Quote:
Not sure why we the top 2% economic elite of India are upset over the hike in taxes
Not exactly, anyone buying on a Company name won't bother much as they will cover by depreciation or lease rental. Problem is with salaried guys who have aspirations and pay full taxes ( 30 % and higher ) and then have to spend 53 % just on GST and another 15 % on Road tax. This is not happening in any part of the world and honest tax payers indeed feel bad. First, the manufacturers here charge more than probably any other country and then Government charges all this besides its human to complain when something gets expensive.

Last edited by Turbanator : 3rd September 2017 at 11:31.
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Old 3rd September 2017, 11:14   #103
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Default re: GST cess on midsize sedans, SUVs & luxury cars hiked

Not sure why we the top 2% economic elite of India are upset over the hike in taxes (GST) on the mid to big cars. A Govt has to find a balance in how it funds itself, the message it gives to the people (all people, not just car buyers) and still give concessions to the sections of the economy that need it. A once in 70 year exercise of simplifying indirect taxes in the 4th largest economy (by PPP) cannot be expected to get every tax rate on a tens of thousands of categories of goods right in the first go. Even a top dog society-economy like Germany wouldn't be able to do it. We need to be fair to the Govt and allow them two rounds of fine tuning. Some rates will go up and some down. GST rates have been revised downwards on several items - school books & school bags, processed foods, pickles, insulin, components used only in tractors and farm equipment and others.

What is missed is that the cascading impact of the earlier multiple taxes and the earlier limitations on set offs has now improved considerably in several input factors for industry. At least in my business while we had to make a huge effort for the transition the cost of composite goods+services bought and sold has the potential for reduction to us and our customers and we already see it happening.

In the earlier set up multiple taxes - service, local sales, central sales, VAT, works contract, excise could not, for the greater part, be set off against each other. With one GST the extent of set off has increased dramatically between what you pay when you (a business) buys and what you collect when you sell. The net effect is a lower overall cost. It is also resulting in lakhs of small suppliers who hitherto dealt in cash to register for GST and pay tax. Because if they don't then their GST registered buyer (say a company) must pay the tax on their behalf without enjoying any set off. More than de-monetization GST will force small & micro enterprises to get registered and start paying first GST and then income tax.

Last edited by V.Narayan : 3rd September 2017 at 11:18.
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Old 3rd September 2017, 11:22   #104
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Default re: GST cess on midsize sedans, SUVs & luxury cars hiked

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Originally Posted by spyder_p8 View Post
In my opinion, anything beyond a small hatchback should be heavily taxed in this country. We should discourage citizens from buying cars . It is not a country for cars. We do not have the roads nor we have any sane drivers behind the wheels.
I sadly have to disagree here. If majority can't own car's why the bias only for hatchbacks, let them tax all car's equally since it (hatchbacks) should also be considered as a luxury vehicle. After all We have very poor infrastructure and majority of us are poor. Also sales wise Hatchbacks contribute to highest volume of sales compared to any other segment, so logically this should be taxed at the highest.

Let's all get back to riding cycles, mopeds and Splendor's then. I see multiple advantages with this too, less conjestion, lesser pollution and less toll on our infrastructure.

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Originally Posted by Dry Ice View Post

Now all this didn't happen overnight, but over a few months. I can see substantial savings overall and as a percentage, the tax out flow has also certainly reduced. I am trying to do my bit, if everybody started doing the same, it would become evident pretty soon.

Might sound extreme, but like I said earlier, when you have an unelected lawyer who is in charge of finances, what's the way out!
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Originally Posted by Samurai View Post


This is what will happen logically as you pointed out. When they increase the taxes crazily like this people will just not be able to spend lavishly which further hampers the economy. Because now Govt will start having that surplus amount and we all well know how that money will be utilized.


Any democratic government makes rules based on what benefits the majority, and not the tiny minority. So you can't expect the tax regime to be kind to this <1% people who can afford nice cars. That is how an government economist would view it and make policy.
The government's only policy is to appease the poor majority. That's what helps them to stay in power.

How else would you explain the govt to get away with such a blunder as demonetization in the country. It's because the minority are too less in strength and can't do anything about it while the majority are uneducated and too poor so obviously they too won't do anything about it.

All in all it is tough times for our economy with uneducated Morons running it. Sorry for going OT guys.
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Old 3rd September 2017, 11:41   #105
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Default re: GST cess on midsize sedans, SUVs & luxury cars hiked

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Originally Posted by stanjohn123 View Post
The government's only policy is to appease the poor majority. That's what helps them to stay in power.
That is what democracies are supposed to do. If the governments pander to rich minorities, then they are just plutocracies. That is what USA has become in the recent years. Few super rich guys fund all the political campaigns and in turn politicians make policies to help the super rich.

Most democratic countries focus on poor because the rich can manage quite nicely by themselves in any country, under any kind of economic system.
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