[balechaparka]

Increase duty on diesel cars up to Rs 2.5 lakh: Jaipal Reddy - The Times of India

[Turbokick]

Even if they go the taxation route, it should be based on some percentage of the ex showroom price. Fixed excise duty is both unfair and ridiculous.
They can vary percentage based on category of vehicles.
Basic UVs like Bolero,Sumo,etc which get registered for commercial purpose should have the least excise.
Luxury cars and SUV should have the highest excise percentage.

Sedans and hatchbacks should stay somewhere in between.

[carboy]

Originally Posted by scopriobharath

For this - Either i need a robust transport like UK / USA or i need to have my own vehicle. Take example of New Jersey, Where public transport is not Robust. Fuel is subsidized and govt promotes usage of car.

New Jersey does not subsidize Fuel. Where did you get this from?

[sumeethaldankar]

With the industry already slowed down this is going to hit all players hard along with the buyers.I think instead of increasing duty etc
on diesel cars the govt should decrease the duty/tax etc on petrol vehicles which would make them more attractive to the car buyer.

But i doubt this will ever happen as the govt and other factors like bad roads , toll plazas,parking woes etc are making it harder and harder to own and maintain a car in this nation.

[ironshark]

There is also news that auto industry will strongly oppose this if at all it materialises. The Govt. is strangling people real hard form all angles. One side, petrol prices are sky high hence people will shift to diesel vehicles and now this. To add to it, the public transport system in our country is in shambles!!

I would have preferred public transport for daily commute anyday had it been upto the mark.

[mmxylorider]

Reasonings are interesting. Will he take a guarantee that diesel prices will not rise for the next 10 years!

[arvind71181]

Inistead of deregulating diesel prices or reducing the levied taxes, the government choses to do this?? I dont understand the logic of increasing the price by this much. How are the assumptions of a 10 year life span for an average car made? Do people really keep cars for 10 years? I was assuming that it would be in the range of 5-6 years.

Also what happens if they increase the diesel price? Will the one time cost to be paid be reduced each time the cost of diesel is increased, as if I understand correctly, the price differential between Petrol and Diesel is also one of the inputs towards this calculation

I am a petrol car owner, but still, I do not find this logic to be correct. Do correct me if I am wrong in my understanding anywhere.

PS: If as usual, this is just a rumour, then kindly ignore the post

[SankalpDesai]

All I can say is - Real tough times ahead.

Agreed that India's dependence on Arab countries for crude oil supplies is at an all time high, which is not a good sign for any country's Foreign policies considering that Middle East is a de-facto sensitive area, the Government should have framed policies accordingly. Just this morning I was reading a news item on Mumbai Metro 1 project. As expected, the project has missed it's deadline, AGAIN. And this is 4th time they've missed it. The V-A-G corridor will now be operational only by March 2013. Till then, the commuters of Andheri and other areas can only dream of empty roads and light traffic.

Indian governments have failed gloriously in understanding the side effects of development. Mr. Manmohan singh did open the economy for foreign players in the year 1991, but they should have ideally started with Infrastructure. Better roads, bridges, water bodies, rapid transport systems, power plants, etc. Instead they started with cars and cold drinks. Result - a country on the brink of chaos.

A government that can't handle growth effectively is as much at fault as a government that doesn't allow it. The current measures to boost or control the economy are nothing but clear signs of vote bank politics. And the ones who will suffer, is the common man.

Just a few days ago, Maruti declared that they shall halt/reduce the production of cars with Petrol engines and shall focus on Diesel instead. Imagine the trouble and resultant chaos companies like Maruti will have to go through due to the policies of this 'Tughlaqui' (fickle minded) government.

[msdivy]

What is the rational for addition tax on diesel cars?

[speedmiester]

Another half baked idea from a politician, where else could we find such irrational logic from.

Obviously this will opposed tooth and nail by the auto manufacturers.

[mohandas]

don't take this guy seriously. After the petrol hike fiasco, even his cabinet colleagues are not taking him seriously nowadays.

[shankar.balan]

They are mad. This will stifle growth completely and will bring to a standstill all the huge investments of Ford, Audi and the rest!

Instead, why dont they let go of some of the tax pie and make it more palatable for the common man. Raise the price of Diesel by another 5-10 bucks - make it Rs 50-55 per litre. Correspondingly bring down Petrol also to 50-55. Cut the taxes and this will happen.

Bring parity, but in a reasonable manner and sacrifice some of the tax money!

[carwatcher]

I am more than 100% sure that this is just another ToI group effort to increase car sales and help GoI divert the people's attention from other serious issues.
Apart from that, the govt. is acting oversmart and pushing 'Divide and Rule' policy way too much. During the budget we already had increase of 2% to 4%(or 6% IIRC) in Excise duty on Diesel as well as Petrol cars. Then we saw Petrol price hike by 7.50 Rupees. Now again this proposal in such a short period shows the frustration of Govt which can't simply hike the price of Diesel due to fear of revolt which is never going to happen. At the same time govt is bound to take some corrective action very urgently else the demand of fuel is getting skewed towards Diesel day by day and resulting in less recovery from falling demand of Petrol.
I would definitely like to read the comments of the fellow Dieselheads who are living in a false sense of security and thinking that 'they' took the 'smart' decision by choosing Diesel car whereas nothing is in our hands actually.
All I can say that even after this duty hike, the current Diesel car owners are more likely to gain as not only they would be getting Diesel at the same price but may witness prices actually going up of their used cars. It is future buyers who are going to suffer and rightly so as govt just can't simply afford to watch and don't take any corrective action.
The only risk in this policy is unlike high petrol prices which can be reversed as we saw recently, the duty already paid by car buyer can't be refunded back to buyer if it is reduced afterwards and can't be claimed in resale value as the used car price will fall down automatically if new car price falls down due to duty reduction.
PS: Beware of ToI.

[rajshenoy]

Last time they talked about 80K increase and we saw immediate boost in the car sales, so much that the monthly sales of popular models now seems to be going down(because the potential buyers switched to readily available options)

Another trick to take people for a ride perhaps ?

Or the typical strategy by the Govt. Increase it and then reduce it by a fraction and say we care for common man.

What if the prices of petrol keep falling and goes to good old days ? What about the poor chaps who paid one time premium ?

What if They or the new govt(they keep doing this and the govt is bound to fall in 2014) increase the prices of diesel ?

This is crazy. I feel sick for voting such brain dead morons to enter parliament.

[samarjitdhar]

Originally Posted by Turbokick

They can vary percentage based on category of vehicles.
Basic UVs like Bolero,Sumo,etc which get registered for commercial purpose should have the least excise.
Luxury cars and SUV should have the highest excise percentage.

Sedans and hatchbacks should stay somewhere in between.

Umm. I think the manufacturers can make a legal case of discrimination out here. Some of the Boleros and Sumos are still purchased for personal use and trying to impose excise based on usage will be a tough line to sell to the Supreme Court. All they can do is impose a tax/excise based on engine sizes as they have been doing till now since it can be argued against amount of fuel consumption otherwise the approach that you are suggesting doesn't hold much water legally. The other option is to impose a percentage excise/tax on the showroom price of the vehicle. Either way the amount being proposed here will result in a significant increase in the OTR price of what the Tatas and the Mahindras produce and will be like trying to put them out of the passenger cars business. If this kind of proposal sees the light of day this government will either fall or will be voted out forever for sure.

Originally Posted by SankalpDesai

All I can say is - Real tough times ahead.

but bang on. Wait till the monsoon bullet hits the government this year. Till end of May this year, the met department was beating their chests about normal monsoons and what not. By the first week of June they were hemming and hawing. Now there are crickets chirping. Sometimes I think one of those important Hindu deities come down to earth every night and whispers the weather forecast into the met department director's ears when he is asleep .

Another masterpiece from the our met department was when they contradicted the US and the Oz met departments who had predicted a 50% chance of an El Nino this year by announcing yesterday that there was only a 30% chance of an El Nino. Case in point, the US and Oz met departments diligently track the El Nino phenomenon because it affects their rainfall. Our met department doesn't track this phenomenon even though it is clear from the last 15 years it affects our monsoons and still they make such bold pronouncements (head banging again, only two smileys per post).