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Old 4th August 2011, 16:45   #151
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Default Re: Gov't considering tax hike on diesel cars

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Originally Posted by channelv View Post
Gov't never gives subsidy to any fuel, be it petrol or diesel. The word subsidy is grossly misused by the politicians to trick us.

The Gov't taxes a few rupees less on diesel and calls it "Subsidy"!
In reality Gov't (State + Central) taxes come close to 100% of actual cost. If a liter of petrol cost Rs. 65, the total taxes comes to around Rs. 30.

The "Subsidy" loss as Gov't calls it, is basically the revenue loss occurred as a result of them not able to rip off form citizens as much as they would have liked.
You are right 100 per cent. It means, Govt. is not looting us over diesel prices as much it is looting us over petrol prices. That is their grouse. They want to loot us there, too. Subsidy, my a$$. It's euphemism for loot.
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Old 4th August 2011, 16:45   #152
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Red face re: Rationalising diesel prices*Update: 50p rise/month announced*

This is not going to happen soon but will definitely be done in say another 6 months to 1 year time period, my gut feeling.

If the diesel prices are deregularized the worst hit will be the Auto sector who are already reeling under falling sales. Its the diesel segment which is keeping some manufacturers in profit.

The present govt still has a couple of years in office and they would not want to take such a risk.
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Old 4th August 2011, 16:54   #153
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Originally Posted by ghodlur View Post
The present govt still has a couple of years in office and they would not want to take such a risk.
Where's the risk in that? In fact that's the safest choice. With elections in UP next year it will dare not increase fuel prices further. Raising taxes on diesel vehicles assures them of more revenue while hitting only the auto companies and, indirectly, people who were keen on buying diesel cars. But they never vote (most of them don't anyway). So they don't stand to lose much votes over this agenda at least.


Sorry for being off-topic, but I think it's getting clearer and clearer. The middle class (especially upper middle class) doesn't believe in voting/elections because every politician is corrupt and there votes deserve better (hah!). Since you are not a vote bank, you get screwed.
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Old 4th August 2011, 16:58   #154
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Default Re: Gov't considering tax hike on diesel cars

I know there are some taxes (cetral + state) involved on the fuel. But all these days I was thinking that there is a subsidy on diesel (the very reason: agriculture and public transport).

I'm not supporting the Govt., here. All I'm saying is that if you can afford a car, you definitely can afford the fuel. Why should a petrol car owner shell out more for the fuel than a diesel guy do?
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Old 4th August 2011, 17:09   #155
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Originally Posted by Abhi_Automobile View Post
An example is in front of us. Our taxation system. The employed 'upper middle class' junta gets TDS, while the 'rich' businessman doesn't pay any tax coz he shows his salary as 5 l.p.a. Another one of such things coming up. Govt promoting black marketing.

Oh, yes. I'll believe it when it happens. This discussion has gone on for ages.

BTW, I think our FM is one of the poorest performing ministers.

Disclaimer: I have 3 petrol cars. So, I am not a diesel supporter. Although my next purchase will be diesel one.
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Originally Posted by asr245 View Post
Sorry for being off-topic, but I think it's getting clearer and clearer. The middle class (especially upper middle class) doesn't believe in voting/elections because every politician is corrupt and there votes deserve better (hah!). Since you are not a vote bank, you get screwed.
All of India does great talking about our Shining Country. There are two topics where in no politician or businessmen speak a word about. I will be mentioning one and i.e. Corruption.

This move is towards more black market and nothing else. Why increase prices. Where was the planning ? Why it did not happen earlier ?

The salaried middle class is suffering the most. Cost of everything is increasing like never before. And this will create a massive slowdown in auto industry. Many will be hit for sure. And have to face recession as the direction which we are heading into is unstable and volatile.

I am feeling unfortunate as being a part of middle class in India ( and please dont bring Pakistan into comparison ). Seriously this is getting onto my nerves. Price rise of cars, price rise of fuel.

For the record :
  • Rs. 15,000/- straight tax if one is buying a car that is bigger than small car ( by indian standards, yes that same 4m. rule )
  • When one buys a car, excise duty, RTO, Insurance, VAT all are included. Excise duty @ 22% ( for large cars ), and VAT. Then Insurance and RTO,etc. Around 10% increase from Ex-showroom price.
  • Whenever the car is serviced, additional tax. In a way car owners are creating and supporting employment when servicing cars ( and obtaining bill ). But we still pay tax.
  • When we fill in fuel, we pay tax here too.
Just imagine the amount of tax we pay. And for the record, petrol in Pakistan is cheaper than India.

God save this country, and what is worrying is not the current scene, but future. What the future generations will see ?

Last edited by aaggoswami : 4th August 2011 at 17:10.
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Old 4th August 2011, 17:10   #156
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Default Re: Gov't considering tax hike on diesel cars

This is a good idea (additional tax on personal diesel vehicles) since low cost of diesel in India is to support farmers, transporters and heavy machinery. In many countries Diesel is costlier than petrol.
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Old 4th August 2011, 17:17   #157
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Originally Posted by sumeethaldankar
Well i guess i don't know the good or bad part of this but i guess the license plate colors (black on white background) could be used to classify the vehicle as a non-subsidied diesel vehicle.
This will only increase corruption at petrol bunk level. The guy filling the tank can take 100 Rs from someone and give him cheap fuel meant for commercial vehicles.
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Old 4th August 2011, 17:19   #158
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

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Originally Posted by aaggoswami View Post
The salaried middle class is suffering the most.

I am feeling unfortunate as being a part of middle class in India

Just imagine the amount of tax we pay. And for the record, petrol in Pakistan is cheaper than India.
@aaggoswami
Speaking for myself, I feel the pinch and pain as much as you (or anyone of the salaried middle class).
The problem here is that the salaried class pays tax twice without any benefits whereas the self employed class at least gets some benefits. By way of depreciation on business owned car/ telephone etc.
IMHO this is the resentment that the salaried class have of the dual taxation system. Perhaps with the inflation at such levels, it may be worthwhile to consider moving to an effective uniform single taxation system that ensures equal taxation levels across all strata. Of course, I am no economist, but this would be at least some relief for those among us who pay tax honestly upfront (including some of the self employed ones who do)
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Old 4th August 2011, 17:35   #159
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

I think this measure to be implemented by Govt is not to control the inflation rate but instead to give advantage to the oil companies. If this is allowed, then the transport plyers will only enjoy the low rate diesel price and to all the private cabs and normal people like us will have to pay a heavy premium for the diesel and also there exists chance of an agreement between the Pumps and the taxi cabs for subsidized diesel.

The congress government is turning to be bad day by day. Very inefficient and just allowing everything to happen against people. Absolutely no control over the economy of India. Also i am very much worried about the America's financial crisis because of which we have already seen the stock markets dipping day by day and also the gold prices increasing steadily.
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Old 4th August 2011, 18:38   #160
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Default Re: Gov't considering tax hike on diesel cars

Tax on the cars is one thing, but I have always been advocating decontrolling the diesel prices on cars and other non-commercial transport usage (trucks and buses for now). Finally the FM seems to have woken up Car owners may not get subsidised diesel: Government - The Times of India
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Old 4th August 2011, 18:42   #161
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Default re: Rationalising diesel prices*Update: 50p rise/month announced*

Few cents from my side:

For All diesel vehicles except farm-tractors, railways, state owned transport buses, put an yearly tax of Rs 20000=00 or 30000=00 and collect it as part of insurence renewal.

This additional tax can be passed onto the oil marketing companies to recover their losses...

Simple and effective idea.

Yes there will be few, who will not renew the insurence, but it is at their own risk. So no black marketing of the oil will take place.

And everyone knows that insurence is very must, without which every one will fear of traffic police. If found that no insurence, minimum fine is Rs 500. So, increase this fine too to 5000.
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Old 4th August 2011, 18:46   #162
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Default Re: Gov't considering tax hike on diesel cars

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Originally Posted by Vasuki View Post
Does this proposed hike changes scenario of whether Petrol or Diesel cars are economically viable? Any idea how it will affect long run for say 5+ years. I have good notion of changing my booking of Swift Zdi to Swift Zxi. Pls comment.
If implemented this tax will not be in place for longer than 1-1.5 years after which a unified Goods and Services Tax will replace Excise Tax and the rate, as the name suggests, will be the same for all goods and services (other than fuels and liquor).

In any case it makes a lot more sense to raise the price of diesel than to tax diesel vehicles - people who use more fuel should pay more. Simple.
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Old 4th August 2011, 18:57   #163
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Default Re: Gov't considering tax hike on diesel cars

Personally I'd support any move to do away subsidies on diesel on car/taxis/luxury buses etc. Even if diesel and petrol were priced similarly there would still be some advantage for diesel as it has more calorific value.

Litre to litre diesel vehicle enjoy a better FE than petrol vehicles. This means that they burn less fuel, and hence should possibly be encouraged. Do away the subsidy by all means, without increasing corruption, improve the quality of fuel, and incentivise use of efficient vehicles, by taxing the vehicles depending on carbon emissions per km.
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Old 4th August 2011, 19:01   #164
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Default Re: Gov't considering tax hike on diesel cars

Quote:
Originally Posted by channelv View Post
Gov't never gives subsidy to any fuel, be it petrol or diesel. The word subsidy is grossly misused by the politicians to trick us.

The Gov't taxes a few rupees less on diesel and calls it "Subsidy"!
In reality Gov't (State + Central) taxes come close to 100% of actual cost. If a liter of petrol cost Rs. 65, the total taxes comes to around Rs. 30.

The "Subsidy" loss as Gov't calls it, is basically the revenue loss occurred as a result of them not able to rip off form citizens as much as they would have liked.
Thats a very valid point you made ! We choose to be ignorant and deserve to be taken for a ride by the politicians

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Originally Posted by patron View Post
Tax on the cars is one thing, but I have always been advocating decontrolling the diesel prices on cars and other non-commercial transport usage (trucks and buses for now). Finally the FM seems to have woken up Car owners may not get subsidised diesel: Government - The Times of India
Brilliant ! Thats recipe for creating a black market, more corruption . Anyone selling an old dilapidated truck for less than 50K (a few Shaktiman's would be available), I am a buyer - all diesel purchases would be done in the name of truck .
Either decontrol diesel prices but please - no conditional decontrol . We have enough of corruption to deal with

Last edited by souravc : 4th August 2011 at 19:02.
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Old 4th August 2011, 19:03   #165
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Default Re: Gov't considering tax hike on diesel cars

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Originally Posted by Vasuki View Post
Does this proposed hike changes scenario of whether Petrol or Diesel cars are economically viable? Any idea how it will affect long run for say 5+ years. I have good notion of changing my booking of Swift Zdi to Swift Zxi. Pls comment.
Lets do some math here:
If diesel is desubsidized, then an increase of 15 rupees per liter. It would be available at Rs 60 per liter. Which is still cheaper than petrol by ~10 rupees and fuel efficient yet.

Lets average this:
Efficiency P - 14/L (Highway + City combined)
Efficiency diesel - 17/L (Highway + City combined)

Running cost P - 5.14 Res/Km
Running cost D - 3.53 Res/Km


Yearly running cost - 15K Kms
P- 77K
D- 53K

So if you are buying the car without loan and at a 1.25 L premium over the petrol, you would need little less than 6 years to make up your money

And if you are buying it on a loan period of 5 years, then you would probably end up paying ~ 2 lakhs interest included, and thereby whould need umpteen years for your diesel car to lay egg.

If you Wait and watch (But if the diesel prices remain subsidized and the car price rise (read tax), then you would curse yourself on not acting fast and buying the diesel.
But in all cases, this is going to happen in the next few years. (One thing or the other)

My suggestion:
Drive both cars. If you love driving the diesel for its mid range torque, buy that.
If you like the free revving petrol and its quietness, buy the petrol

Forget what amount of money you save and enjoy your car.
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