[Santoshbhat]

The definition is kind of vague. The explanation says "For the purposes of this entry, SUV includes a motor vehicle of length exceeding 4000 mm and having ground clearance of 170 mm and above."

What happens if we have a sedan with a 1.5L engine, >4000mm in length and with a GC >170mm. For example the petrol Maruti SX4, the petrol Toyota Corolla etc...

Edit :

Originally Posted by Vid6639

My Altis is more than 175mm and greater than 4 metres and has a 1.8L engine. How in the world can it be a SUV??

This is mind blowingly insane.

Toyota may lower the car by 6mm now

[tsk1979]

This whole engine capacity thing is braindead.
IF you want to encourage small cars and fuel efficiency, you should have "weightage in slabs"
For example
5% + 5%
So a 4000mm car having FE of 20 will pay 10% excise
Every 100mm increase will mean a 1% increase in excise
Every 1kmpl decrease will mean a 1% increase in excise
So something which is 5000mm means
10 + (10% for length, and 8% for FE) = 28% excise duty.

This system is fair and rewards cars which are
A. Smaller
B. More fuel efficient

But I doubt anybody in the govt has enough motivation to bring about such a radical logical change.

[GTO]

Guys,

I've received a lot of quotes from industry folk. Seems that the hike in excise duties is for MUVs & SUVs both (but not cars like the Altis or SX4).

Currently working on an article that will explain the budget in a simple manner.

[Vizay]

Originally Posted by tsk1979

This system is fair and rewards cars which are
A. Smaller
B. More fuel efficient

But I doubt anybody in the govt has enough motivation to bring about such a radical logical change.

No credit for making/selling safer cars in your proposal?
ABS/Airbag/Other safety features?

[tsk1979]

Originally Posted by Vizay

No credit for making/selling safer cars in your proposal?
ABS/Airbag/Other safety features?

Those should be compulsary, but I doubt SIAM will allow that. I am proposing an alternative to the current arbitrary system.

[apachelongbow]

I dont understand this mentality. People who can afford can pay a bit more. Is this some kind of extortion racket by a local goon or a budget by the goverment of the world's largest democracy. What extra facilities are they providing by charging more? anything at all?

[StrangeWizard]

I think the criteria for a car to be called an SUV should be its actual height and not the ground clearance!
The SX4 has more than 170mm ground clearance.

[Vid6639]

The criteria for an SUV should be seating capacity. Anything more than a 5 seater should be an SUV. Yes this may result in Toyota, Mahindra and Tata launching 5 seater versions of Innova, Fortuner, Scorpio, XUV and Storme but what's the point in taxing cars like the Renault Duster that have a 1.5L engine which is smaller than most sedans in that segment that have 1.6L and even the overall length is lesser than most sedans.

[Santoshbhat]

Originally Posted by apachelongbow

I dont understand this mentality. People who can afford can pay a bit more. Is this some kind of extortion racket by a local goon or a budget by the goverment of the world's largest democracy. What extra facilities are they providing by charging more? anything at all?

The Govt. of India builds roads, bridges, provides 'subsidized' diesel (that's debatable I know) and whole lot of stuff which is required by the people of India. To this end they need money and the only way they can do that is tax.

I know nobody likes to pay more tax . The govt. has increased excise duty by 3% on big SUV's which is a luxury very few in the country can afford. On Rs. 25 lakh SUV, this works out to something like Rs. 75,000/-. I am not justifying the Govt's. actions here buddy. They've got a lot of things on their plate and this is one very insignificant part of the budget in terms of the overall impact it is going to have on the people of India. All I am trying to say is that likening the Govt. to an extortionist for hiking excise duty by 3% on big SUV's is just too extreme a reaction.

[apachelongbow]

Originally Posted by Santoshbhat

The Govt. of India builds roads, bridges, provides 'subsidized' diesel (that's debatable I know) and whole lot of stuff which is required by the people of India. To this end they need money and the only way they can do that is tax.

I know nobody likes to pay more tax . The govt. has increased excise duty by 3% on big SUV's which is a luxury very few in the country can afford. On Rs. 25 lakh SUV, this works out to something like Rs. 75,000/-. I am not justifying the Govt's. actions here buddy. They've got a lot of things on their plate and this is one very insignificant part of the budget in terms of the overall impact it is going to have on the people of India. All I am trying to say is that likening the Govt. to an extortionist for hiking excise duty by 3% on big SUV's is just too extreme a reaction.

If the govt gives me, an honest tax paying citizen, decent public transport, sealed roads with pavements, clean water, 24 hours electric supply and assured safety and security, i will gladly pay even 50% of my income as taxes, thats besides the point of this thread.
If I am not getting even 1% of my tax money as overall benefits then goverment is plainly what I called them above.

[swiftnfurious]

I think the definition would hold good on the engine capacity (>1.5L), length (>4m) and GC (>170mm). In addition they can bring in seating capacity (>5) too. This will automatically move all MPV / MUVs & SUVs to the new taxable bracket. This would also ensure the compact SUVs are NOT taxed. The seating capacity parameter will prevent sedans from falling into the same bracket as MPV / UVs.

Originally Posted by tsk1979

...IF you want to encourage small cars and fuel efficiency, you should have "weightage in slabs"
For example
5% + 5%
So a 4000mm car having FE of 20 will pay 10% excise
Every 100mm increase will mean a 1% increase in excise
Every 1kmpl decrease will mean a 1% increase in excise
So something which is 5000mm means
10 + (10% for length, and 8% for FE) = 28% excise duty.

This system is fair and rewards cars which are
A. Smaller
B. More fuel efficient

That's a beautiful thought. Will work out really well.

Originally Posted by Vizay

No credit for making/selling safer cars in your proposal?
ABS/Airbag/Other safety features?

Originally Posted by tsk1979

Those should be compulsary, but I doubt SIAM will allow that....

The same way you have mentioned the additional tax, the government should also start taxing the variants with NO safety features. It should work out that the tax on the lower variants (without safety variant) shall work out to (nearly) the same price as the top variants with features. Then people will automatically start choosing the top variants for the extra features without paying unnecessary taxes.

Edit:: If the ministers had this level of common sense to make the correct rules, they would have been doing some white collar job & NOT in the parliament!

Edit 2:

Anand Mahindra responds this way

'Space occupied' was the reason to tax SUV's.And yet larger,more luxurious sedans are exempt.Neither an equitable nor an inclusive rule..

[Akshay1234]

What I hear is that the total hike on CBUs will come to 34% on the ex showroom price. I don't know the break up but if a car costs 1cr ex showroom now it will cost 1.34 after the budget. Ridiculous.

[apachelongbow]

Chidambaram, saw that people are buying more and more cars, especially SUVs, hence decided to take his share of the pie. He is desperately short of money as we can see in the budget with massive wasteful spending + corruption in the names of various Rajiv/Gandhi yojanas which on paper plan to give free food and dole outs to the poor.

Its nothing to do with any mature/firm policy, any sector which was making money was his target, example mobile phone sales. Can one imagine how much 6% duty on each handset will net the govt?

Its election year and this is the last full budget before election year, if the govt cannot push more doleouts for the 'have nots' they cannot expect any votes.

If the honorable minister was truly serious of pursuing 8% growth, the only way he could have prodded the economy was to increase spending power of the people, by reducing personal and corporate tax rates, promoting FDI in various sectors, reducing interest rates, boosting loans and giving tax breaks to critical sectors like auto, aviation and IT. This would have boosted stock market sentiments, promoted more spending, thus more manufacturing and ensured that the economy recieved a crucial step up.

[lurker]

It seems Duster Petrol comes above 1.5 ltr engine category and Duster Diesel is under 1.5 ltr category. And both have 205 cm ground clearance.

[.Albatross.]

Originally Posted by akshay1234

What I hear is that the total hike on CBUs will come to 34% on the ex showroom price. I don't know the break up but if a car costs 1cr ex showroom now it will cost 1.34 after the budget. Ridiculous.

Too hard to digest !

I just can not understand this big a hike in CBU prices. It has been ages that we have been anticipating lowering of duties on the imported ones especially the Germans but I dont think its going to be a reality in this life.

A hike of 34% maybe too big for the small ones like the Minis and the Beetles.

Will a CKD be classified as an Indian/ Foreign? Any percentage of localisation which draws the line ?