[kovilkalai]

Originally Posted by Jerryaj

I guess that is for two reasons, 1. Not everyone is going to buy a vehicle from CSD, believe me on this my dad during his entire service in Army and retired life, has bought only one vehicle (Activa) from CSD. And if government had to cut down these benefits and increase the salary component it will cost them much more.

Assuming that the discount comes from the Indian government and not the generosity of the Marutis of the world, how does this work? If I buy 3 cars during my service in the army and you don't buy a single car, all else being equal, you have been compensated less for the same amount of service (simply because you have chosen to take public transport). This isn't fair to you. Shouldn't you be compensated in another way?

If the cost of giving discounts to cars (or for that matter anything else) is Rs. 1000 crores (the value of the subsidy plus the administrative costs of running the CSD), why not divide this money proportionately by position? Let each officer/jawan figure out what he/she wants to do with this extra money. The guys wanting to buy cars will definitely have to cough up more out of pocket, but the guys who don't want to buy cars will not be penalised for their choice. They can choose to use this extra money to travel somewhere (because they like travel over owning a means of conveyance). This is quite possibly more efficient and fair (not to mention the savings for the Indian taxpayer thanks to reduced fraud).

[KMT]

The CSD primarily exists to make goods available to soldiers in remote and far flung areas where shops do not/did not exist.
As time has progressed the CSD has evolved with society and has made more goods available under its umbrella.

As for having a uniform rupee amount disbursed amongst all servicemen to reduce inequitable distribution of benefits the knife cuts both ways. For example, all of us car owners pay a uniform road tax irrespective of the KMs we drive, thus the marginal utility (benefit) derived by a frequent road user is greater than that the benifit derived frrom an occasional driver.
While this is 'unfair' from a financial sense, while framing broad public policy its often not possible to come out with a rule that suits everyone.

The CSD benefit on cars is essentially the waiver of CGST of 14% and the cost is bourne by the central govt.

I hope this explanation helps.

[Jerryaj]

Originally Posted by headbanger

Off topic but curious to understand this situation. I have seen there is a considerable amount of corruption in this arrangement where civilians end up getting the FMCG items by various means at lower prices meant for armed forces. Don't ask me how

Since these items are at lower rate, who ends up getting the financial loss- govt, armed forces or the FMCG corporates?

Yes , there is a lot of corruption here and for best reasons I'd choose not to discuss the same here due to sensitivity of the topic. But to answer your question, the government takes the beating due to lesser tax collection on the product. The manufacturer and the consumer gain here.

Originally Posted by kovilkalai

Assuming that the discount comes from the Indian government and not the generosity of the Marutis of the world, how does this work? If I buy 3 cars during my service in the army and you don't buy a single car, all else being equal, you have been compensated less for the same amount of service (simply because you have chosen to take public transport). This isn't fair to you. Shouldn't you be compensated in another way?

If the cost of giving discounts to cars (or for that matter anything else) is Rs. 1000 crores (the value of the subsidy plus the administrative costs of running the CSD), why not divide this money proportionately by position? Let each officer/jawan figure out what he/she wants to do with this extra money. The guys wanting to buy cars will definitely have to cough up more out of pocket, but the guys who don't want to buy cars will not be penalised for their choice. They can choose to use this extra money to travel somewhere (because they like travel over owning a means of conveyance). This is quite possibly more efficient and fair (not to mention the savings for the Indian taxpayer thanks to reduced fraud).

If I understand the working of CSD system correctly, it is not discount which is being provided. It is more like exemption in tax which is provided for the vehicle as also pointed above by KMT (Road tax and other RTO charges are still applicable). So the essence here is the government willingly let go a part of income it should have got, for rolling out these benefits. Which makes me believe is easier and beneficial for them to do as against paying up front.

[sibot]

Source: https://twitter.com/yashpal17/status...27611870359553

https://www.timesnownews.com/auto/fe...rom-csd/426604

As per these restriction, Indian Army officers can now only buy a vehicle valued up to ₹12 lakh from the CSD Canteen and that too only once in eight years. On the purchase of this vehicle, the officer will also get an exemption from GST on the value of the car in addition to the regular cash benefits, provided that vehicle's engine capacity is up to 2,500 cc.

Indian Army jawans, on the other hand, can buy a car up to ₹6.5 lakh once during their service and once after their retirement from the CSD canteen. However, they will not receive any GST exemption.

https://auto.economictimes.indiatime...m-csd/69511960

Under the new restrictions imposed by the Indian Army to cut down the expenditure of CSD canteens on vehicles, the officers can buy vehicles valued upto Rs 12 lakh excluding GST, an Army order issued in this regard said.

As per the new rules which will come into effect from June 1, the officers would be allowed to purchase cheaper cars from CSD canteens only once in eight years and the cars should be upto 2500 cc engine capacity, the order said.

After the new order, jawans would be allowed to buy cars once during their regular service and once after retirement worth around Rs 6.5 lakh including GST.

Explaining the reasons, Army officials said approximately Rs 17000 crore annually is sanctioned by Parliament for CSD under miscellaneous heads. "CSD does a price negotiation for all items introduced and then a 50 per cent GST rebate is given by govt on that reduced price. Though the CSD creates a profit of almost 500 crore annually as CTS and deposits another approximately Ra 150 crore into the consolidated fund of India, the 50 per cent rebate is viewed as a loss to exchequer by finance authorities," they said.

NDTV:
Navy Chief Buys Jeep Compass From Canteen Weeks Before New Rules Kick In (ignore the clickbait title)

In a letter sent on May 24, the Integrated Headquarters of the Ministry of Defence has decided to restrict the entitlement of four-wheel vehicles. Now, officers and other ranks can only procure cars once every eight years.

Senior officers can buy one with an engine capacity of up to 2,500 cc. Other ranks are entitled to one with an engine capacity of 1,400 cc; these must not cost more than Rs. 5 lakh.

So this means there will be no cars above the price of 12 lakhs available via CSD. From what it looks like, a cap of 2500 CC and 12 Lakhs excluding GST has been introduced.

[drmohitg]

Originally Posted by sibot

NDTV:
Navy Chief Buys Jeep Compass From Canteen Weeks Before New Rules Kick In (ignore the clickbait title).

I usually follow NDTV as the sole news provider but this piece of news is in extreme poor taste and similar to what other channels keep poisoning us with. The chief has done nothing wrong and as per the rule of the day can make that purchase. Making it sound as if he tried some dirty trick and is enjoying undue benefit is in very bad taste here.

[sibot]

Can someone please explain the GST exemption factor here? Are the personnel liable to pay GST? Afaik, GST is 28% on motor vehicles. Some clarity would be much appreciated.

Originally Posted by drmohitg

I usually follow NDTV as the sole news provider but this piece of news is in extreme poor taste and similar to what other channels keep poisoning us with. The chief has done nothing wrong and as per the rule of the day can make that purchase. Making it sound as if he tried some dirty trick and is enjoying undue benefit is in very bad taste here.

I agree with you, I too feel it was in poor taste as if the order was passed in a way to benefit the chief. It is regrettable.

[KMT]

As I explained earlier, the central govt foregoes its share of GST.
CSD cars are exempted from 14% CGST through a roundnabout mechanisim. Thus 28% GST becomes only 14% SGST.

[sibot]

Hi,
I wanted to clarify something. Is there any minimum tenure/service requirement for purchasing a car via the CSD? My father served for a very short period of time and we are availing CSD grocery and liquor facilities on the basis of that. But I am not sure if there are any minimum tenure/service requirements for the purchase of a car. Any help would be much appreciated!

[naveendagar]

Yes as per current policy one can buy only after gap of every 8 years and only up to vehicle cost of 12L exclusive VAT.

Can I ask what rank your father retired?

[Cleatus Wesley]

Hey!
My father is a civilian officer based in Chennai. I want to purchase a car through CSD in Bangalore, is it possible or do I have to purchase from Chennai depot only.

[his-xc-lnc]

Originally Posted by sibot

Hi,
I wanted to clarify something. Is there any minimum tenure/service requirement for purchasing a car via the CSD? My father served for a very short period of time and we are availing CSD grocery and liquor facilities on the basis of that. But I am not sure if there are any minimum tenure/service requirements for the purchase of a car. Any help would be much appreciated!

No. No duration as far as service is stipulated. you get entitled to all csd facilities once enrolled into defence services. Therefore, yes you can purchase a car. Secondly, service/tenure restrictions are activated once you purchase a car from csd for a particular rank structure. Hence, kindly check your eligibility, buy the car and thereafter, wait for stipulated period before buying next car from csd again.

[his-xc-lnc]

Originally Posted by Cleatus Wesley

Hey!
My father is a civilian officer based in Chennai. I want to purchase a car through CSD in Bangalore, is it possible or do I have to purchase from Chennai depot only.

The practice of purchasing car from duty station was until GST was not in place and hence, every state had varied rates of car in csd, thus attracting buyers from different places to a cheaper csd depot. This isn't the case now, and hence you can buy from any state/place of your choice provided the dealer doesn't have issues with respect to existing demands/waiting. All the best.

[Cleatus Wesley]

Originally Posted by his-xc-lnc

The practice of purchasing car from duty station was until GST was not in place ...

Thank you for the information. I'll contact a dealer in Bangalore regarding this.

[grimmreaper_gtr]

Is the 12L price ceiling likely to go anytime soon? Or is it actually here to stay? I've heard rumours both ways.

[PGA]

Looks like Harley's have been approved in CSD. Two models Street Rod XG 750A and Street 750.