[nareshtrao]

All, I am unable to figure which thread this should go to as this issue belongs under Mercedes, Dealer and RTO. Hence posting here. @GTO and other Senior mods, Kindly feel free to move this post if you deem fit for another thread.

I bought a C220d in March 2019 from Akshaya Motors, Bangalore. I completed my loan last month and sent the documents to RTO through an agent for Hypothecation removal.

The agent called back and said that the Dealer had billed the car at discounted value and paid Registration and Road Tax on the discounted value. Instead they should have paid the tax on list price. Hence, I am now liable to pay additional tax on the value of the car (per the 2019 price list) along with Penalty for 3 years.

I reached out Akshaya motors ownership and management seeking help in resolving the issue. They washed their hands off and said this is between RTO and me and they have no role to play.

My contention is that if they under-invoiced the car to offer me discount, they could have been transparent and asked me to pay the full Road Tax if that was legally due. On the other hand the question is how could RTO register the car for lower value if that is what the rules said then. While I am fine to pay the tax difference, neither the RTO nor the Dealer are able to show any notice or circular to the effect that such a rule prevailed then. My other contention is that how am I liable to pay the penalty if the error was either at Dealer's end or at RTO's end given that the car was indeed registered.

Most importantly, the behaviour of Akshaya Motors management in providing support or complete lack of it is absolutely appalling. Very rarely us general public deal with RTOs and the least I expected as a buyer of a premium car is that they will help.

Any of you faced any such issue ever? Any guidance would be appreciated.

[Turbanator]

Originally Posted by nareshtrao

that the Dealer had billed the car at discounted value and paid Registration and Road Tax on the discounted value. Instead they should have paid the tax on list price. Hence, I am now liable to pay additional tax on the value of the car (per the 2019 price list) along with Penalty for 3 years.

Heard such a thing for the first time, can you confirm if you have paid the RTO or the dealer directly and you paid to them? In most places, RTO was calculated at MRP and only in a few based on actual sale price. This practice of charging as per discounted rate was stopped sometime during 2018-19 if I am not mistaken everywhere and manufacturers had to update the prices in the Vahan portal.

If the RTO office has not sent you any demand all these Years and the tax was paid by the dealer, you will need to involve the dealership in this as well. They can try using their contacts at RTO to convince or you can visit directly and meet someone senior. But if an amount is reflected in their system, this may not help and you will have to either pay or take the matter to the court.

Not a good situation to be in but you will need to take a call considering the total demand vs the time/ money you will have to spend on legal recourse.

[nareshtrao]

Originally Posted by Turbanator

Heard such a thing for the first time, can you confirm if you have paid the RTO or the dealer directly and you paid to them? In most places, RTO was calculated at MRP and only in a few based on actual sale price. This practice of charging as per discounted rate was stopped sometime during 2018-19 if I am not mistaken everywhere and manufacturers had to update the prices in the Vahan portal.

I paid to the dealer and the tax was charged on the discounted price. The dealer guys tell me that the rule came in later in the year about paying tax on MRP but they refuse any further assistance to help and asked me to pay up.

Going legal is not an option given the bandwidth and absolutely happy to pay if that is the liability. But the point on penalty and the attitude of the Dealer management baffles me.

Moreover, given RTO did register the car then implies that either the rule was not in place then or they made and error.

[PrideRed]

Originally Posted by nareshtrao

All, I am unable to figure which thread this should go to as this issue belongs under Mercedes, Dealer and RTO. Hence posting here. @GTO and other Senior mods, Kindly feel free to move this post if you deem fit for another thread.

I bought a C220d in March 2019 from Akshaya Motors, Bangalore. I completed my loan last month and sent the documents to RTO through an agent for Hypothecation removal.

The agent called back and said that the Dealer had billed the car at discounted value and paid Registration and Road Tax on the discounted value. Instead they should have paid the tax on list price. Hence, I am now liable to pay additional tax on the value of the car (per the 2019 price list) along with Penalty for 3 years.

Any of you faced any such issue ever? Any guidance would be appreciated.

I had this issue long ago, I don't recall if it was under invoiced or an error by RTO. I did not calculate the amount while paying however came to my notice couple of months later and realized I had paid lesser than what was mentioned in brochure. I checked with RTO and agent who washed off saying as long as I got receipt all ok. Year down the line got a call from RTO saying they made a mistake and accounts is not tallying up. They agreed its their mistake and were kind. Asked if I could pay the amount(around 4-5K) else they would pool them self and pay. I paid the amount and also got a receipt.

This is my understanding, if the discount is from dealers pocket, then RTO will have to tax on ex-showroom before discount, but if discount is from manufacturer, discount is on ex-factory and hence lesser road tax.

[GTO]

Thanks for sharing, nareshtrao! Moving your post out to a new thread so as to warn others. A new thread means 100X the views & 100X the visibility in search engines, including Google. Will add to homepage later this week .

@ BHPians, if you should spot any high-value post in an existing thread that deserves its own new thread, please report the post and we'll move it out for greater visibility.

Thank you!

[CrAzY dRiVeR]

Karnataka RTO is very straight-forward in this matter - You need to pay road tax on the actual price, and not the discounted price. (Unless the ex-showroom price is revised officially by the manufacturer and entered into their systems)

The best resolution would be for you to pay the extra amount due and for Akshaya Motors to pay the penalty amount as that part is solely due to their mistake.

[androdev]

Assuming that you got the tax paid receipt for the full amount you paid to the dealer, the only motivation of the dealer is to make a sale by offering an attractive on road price.

Realistically speaking, I doubt either RTO or dealer will help you in this matter. They should but they won't. You can request the RTO to lower the penalty - you surely have a case for the same. Given the behaviour of the dealer, you should register a complaint with Mercedes.

I hope it's a small amount. Pay it off and move on. It's a bitter pill to swallow but I have learnt not to be a crusader, or atleast be selective.

[nareshtrao]

Originally Posted by CrAzY dRiVeR

Karnataka RTO is very straight-forward in this matter - You need to pay road tax on the actual price, and not the discounted price. (Unless the ex-showroom price is revised officially by the manufacturer and entered into their systems)

The best resolution would be for you to pay the extra amount due and for Akshaya Motors to pay the penalty amount as that part is solely due to their mistake.

Totally agree with you. I thought so too and reached out to Akshaya Motors. However, I have been completely stone-walled and no responses from any one on this matter.

Initially they said this circular came out later in April 2019 to which I asked them to share the same and the price list of 2019 to which I did not get any favourable answer.

Earlier, when I reached out to their leadership, they passed my number to the Sales team and they called me thinking I am a new car prospect. Upon clarifying their concerned person called and said they can do nothing about it and there have been many such cases in the recent past and all of them have gone and paid. I have no further communication from them.

I will now proceed and pay the difference of tax and penalty on my own and through an agent. Expecting them to either facilitate with RTO, which was my expectation at the minimum (like when we buy a car, they do the facilitation) or even pay the penalty is totally futile. They are not even accepting that made a mistake.

This post will ensure everyone is aware of the issue.

[condor]

@Nareshtrao,

This issue has, not surprisingly, been discussed earlier here. Some threads:

https://www.team-bhp.com/forum/india...discounts.html (Road tax in case of discounts)

https://www.team-bhp.com/forum/india...oad-taxes.html (Does "price protection" not apply to the car's road taxes?)

Like you said, Akshaya motors should have been upfront on this. This issue gets highlighted more because of the higher/luxury cars that are sometimes sold at a discount and road tax calculated accordingly. In some cases, buyer is unaware. In others, buyer knows it and tries to get away with it if the RTO doesnt discover it. And there is the RTO/govt, which would say Tax is based on factory & hence ex-showroom prices. Any discounts are between buyer and seller only.

[nareshtrao]

Originally Posted by androdev

Assuming that you got the tax paid receipt for the full amount you paid to the dealer, the only motivation of the dealer is to make a sale by offering an attractive on road price.

I hope it's a small amount. Pay it off and move on. It's a bitter pill to swallow but I have learnt not to be a crusader, or atleast be selective.

Originally Posted by condor

Like you said, Akshaya motors should have been upfront on this. This issue gets highlighted more because of the higher/luxury cars that are sometimes sold at a discount and road tax calculated accordingly. In some cases, buyer is unaware. In others, buyer knows it and tries to get away with it if the RTO doesnt discover it. And there is the RTO/govt, which would say Tax is based on factory & hence ex-showroom prices. Any discounts are between buyer and seller only.

Yes. I got the receipt for the full amount that was paid by me. However, at no point in time I was aware that the taxation is being done at a lower value.

And No, it is not a small amount by any means, Sadly.

[condor]

Originally Posted by nareshtrao

And No, it is not a small amount by any means, Sadly.

And this is the reason the RTO is following up. You wont be able to plead with RTO as ignorance being the reason. I am not sure if you can take Akshaya to court/consumer court either - for misleading you/RTO

On another note, larger tax evations are slowly getting more difficult because the IT dept is using Big Data / Analytics. There is a lot many such features deployed in all departments over the past few years.

[androdev]

Originally Posted by nareshtrao

And No, it is not a small amount by any means, Sadly.

Do you mind telling us the penalty amount? The tax component will definitely have to be paid by you. There is some scope for reducing the penalty - either RTO can relax it or dealer can share a portion of it. The effort should justify the amount at stake.

[nareshtrao]

Originally Posted by androdev

Do you mind telling us the penalty amount? The tax component will definitely have to be paid by you. There is some scope for reducing the penalty - either RTO can relax it or dealer can share a portion of it. The effort should justify the amount at stake.

The tax is roughly around 1.2L and the penalty around 45k. Both are approximate numbers based on telephonic conversations. I have asked for the exact amounts to get the DD made and I should get it later today or Monday. Apparently the penalty is calculated on time lapsed.

I am told by the personnel that the waiving of the penalty is not with the RTO any more and only a Commissioner can decide if there is indeed a case.

[androdev]

Akshay Motors is being penny wise, pound foolish. They should have apologised and offered to pay the penalty. Companies spend so much money and effort on marketing and events but completely mess up the 1-to-1 experiences such as this.

[Chetan_Rao]

This was a prevalent practice until a few years ago with Honda dealers in Bangalore.

The City V-MT variant was just the wrong side of 10L ex-showroom, which they 'invoiced' for ~9.9L to bring it to a lower tax bracket. Essentially, a hefty discount at RTO's expense instead of their own margins.

TOI news article from 2019 about RTO crackdown on luxury car dealers.