[speedmiester]

A Car dealership in Belgaum, Karnataka has been fined by commercial tax department for not providing receipts for "handling charges".

A welcome move, this should set a precedent for dealers to stop charging illegal money which will only encourage corruption.

Car showroom fined for not giving receipts

[san2]

Saw this article in The Times of India
does this mean that the handling charges and logistics charges levied by all the dealers are illegal

http://timesofindia.indiatimes.com/c...w/48832904.cms

[Kings_Wit]

I hope this becomes a norm across all states. Dealers charge anywhere between 4-8k for handling, and in some rare cases even upto ten. Soon they may even start charging the customer for holding inventory. Need stricter regulations.

[ghodlur]

Originally Posted by san2

does this mean that the handling charges and logistics charges levied by all the dealers are illegal

Absolutely, the logistics and handling charges are totally illegal. There was a Supreme Court ruling in this matter which bars any auto dealer from charging any non auto related expenses which include the so called logistics or handling charges. You will have to search in the forum for that ruling.

[scopriobharath]

Quick Question - Why should RTO warn dealers on not charging this. This warning should actually come from courts and other similar bodies, which enforce the law.

As long as RTO gets the road taxes + registration charges and the associated taxes and cess, they should be happy. By Charging the handling charges, I don't the RTO is bothered. It is the end customer, who ends up paying this sum.

Secondly, When spoken to a dealer, they tell these handling charges include dealer yard to showroom --> RTO --> Showroom fuel & Driver costs. this also includes bribes to be paid at various points. I am sure these are already covered by the manufacturer, but unless someone gives a written statement, we are sure to get exploited.

[Autolock123]

In month of April 2015, I had called up Hyundai customer care while buying my new car to check on the handling and logistic component of price. Hyundai said its completely legal

[naveen.raju]

Originally Posted by scopriobharath

Secondly, When spoken to a dealer, they tell these handling charges include dealer yard to showroom --> RTO --> Showroom fuel & Driver costs. this also includes bribes to be paid at various points. I am sure these are already covered by the manufacturer, but unless someone gives a written statement, we are sure to get exploited.

They will need to pay the union guys here in Kerala for unloading the cars. Other than that I dont see any other bribe. I had gone to the RTO couple of days back and I could see two counters reserved for dealers and they were out in a jiffy. I had to spend half a day there and run around for nothing (my work wasnt done) but I could see many dealer representatives getting the work done. A decent handling charge may be reasonable but charging a bomb is atrocious.

[ghodlur]

Originally Posted by scopriobharath

but unless someone gives a written statement, we are sure to get exploited.

Below are the new links which mention the SC ruling which was way back in 2012. IF the dealers are ignoring the ruling and still continuing with the charges, then this has to be complained. FYI, I did not pay any handling or logistics charges during my Fiesta or Punto buying.

http://timesofindia.indiatimes.com/c...w/11369279.cms

http://archive.indianexpress.com/new...arges/1007304/

http://www.gaadi.com/news/supreme-co...onsumers-23419

http://www.team-bhp.com/forum/indian...rges-scam.html

[Ramon]

I was enquiring with all three mojor dealers of Maruti Suzuki in Trivandrum for an Ertiga. It seems around a month back, instructions had come from Maruti NOT to take handling charges

[Rahul Rao]

Handling charges are not legal, but we are taking more service from the dealers than what a dealership is supposed to give. Transport cost & transit insurance ends when the car is unloaded at the dealers stock yard, we expect to receive the car in the showroom in the city. Not all RTO's have registration handed over to dealers. Dealers may have to drive the vehicle to the RTO and back. In states without HSR plates the dealer provides the plates that you would have to get made etc. Amount collected is very high, but extra service that we receive costs the dealer something.

Rahul

[thedragula]

These charges are illegal. I have gotten them waived off while negotiating on the Linea. You gotta put your foot down. May not work with a Hyundai or Maruti, though.

[narayan]

Anyway all of us negotiate the price when we buy our cars. So how does it matter whether the dealer's profit appears in the ex-showroom or under handling charges ?

If one forces the dealer to waive thess charges, the dealer will obviously not budge on the discounts part. So its just left pocket right pocket for them at the end of the day.

[NPV]

Originally Posted by scopriobharath

Quick Question - Why should RTO warn dealers on not charging this. This warning should actually come from courts and other similar bodies, which enforce the law.

As long as RTO gets the road taxes + registration charges and the associated taxes and cess, they should be happy. By Charging the handling charges, I don't the RTO is bothered. It is the end customer, who ends up paying this sum.

It may just be an attempt (though vain!) by the RTO folks to try and come clean on these charges since it quite simply means the dealers are paying a large portion of these "handling" charges as bribes to the RTO folks for registration and road taxes and some preferential treatment like on time delivery of registration certificates - they usually have one or more folks from dealership interacting with the RTO on a daily basis and RTO ensures that all documentation is processed and handed over to these people on time.

Few years ago, the dealers were bearing these expenses but now with more competition and thinner margins, they're passing it on to their customers.

[ghodlur]

Originally Posted by Rahul Rao

Transport cost & transit insurance ends when the car is unloaded at the dealers stock yard, we expect to receive the car in the showroom in the city. Not all RTO's have registration handed over to dealers. Dealers may have to drive the vehicle to the RTO and back.
Amount collected is very high, but extra service that we receive costs the dealer something.

All the costs which are borne by the dealer once the booking order is placed with the manufacturer is compensated by the manufacturer itself. In fact with every booking there is also a dealer margin which is included for every booking. Apart from all these benefits dealers go ahead with the additional charges and give them different heads such as handling, logistics, RTO greasing etc. None of them are applicable therefore. The logic for such charges is usually the showroom maintenance + staff costs for that extra treatment is what sometimes gets on my nerve. They expect us to pay to them for being polite. Hah..

[Mortis]

So I finally got a chance to go with my in Laws for a test drive of the Jazz since they are looking to buy it.
Dealership was Solitaire Honda of Navnit Motors group in Andheri.
Of course since its a popular model, no discounts are available on any trim.

The problem is these guys are blatantly charging the scam "Handling and Logistics Charges" of Rs. 3500 !

Even after telling the salesman and head salesman that its illegal and should be cancelled, and also newspaper articles and forum links, they are refusing to drop it and acknowledge the same, stating that the pricelist and charges have come from Honda directly. Even requests to them to inform and take it up with their management were met with a "No" and not even a "we can try". They gave me a random email address to send a mail to and thats it.

I want to take this matter further and sort it out. I would like Team BHPs advice on how to proceed and links that can help. Like other team BHP members I refuse to fall for such scams and be coerced into this nonsense.

Also they refused to allow me to opt for my own insurance that comes with roadside assistance and were insisting on Hondas option being the only one. They also had a very strange buyback offer and option to get a refund on the NCB at a later date.