[srh]

Originally Posted by timuseravan

Exactly this.
The point was not to reduce the taxes but to reduce the administrative overhead.
As with almost all govt initiative, it could have been implement better. Rather than adding cess and having the stupid 4m, people, ground clearance rules, they should have gone for maybe price based rate.

This is patently incorrect. GST is expected to widen the tax base and bring hitherto untaxed sectors into the tax net. Thus with the widening tax base, it is expected that tax rates are brought down. There is no reason for any goods except for demerit (harmful) goods to be taxed at 28%. Cess is supposed to be imposed temporarily only to compensate states for revenue loss (if any). Initial trends do not seem to suggest any revenue loss - and still they have made the choice to hike the cess. To me this is a start of breaking promises made to consumers at the time of GST roll out.

On another note, one wonders as to what the government is upto with fuel prices - crude oil prices have fallen, the USD-INR exchange rate has become favourable for imports, and still fuel prices are at a mid term high. This is loot.

[abhishek46]

Originally Posted by a4anurag

I am one of these buyers. Hence following the thread closely on what could be the outcome.

Booked a Hyundai Creta top end variant yesterday and waiting period is 30-45 days.

In the customer docket, the terms and conditions mentions one line that says it all:

"Prices at the time of delivery shall be applicable!"

So it is all wait and watch situation.

What a co-incidence! I asked the question on behalf of my Father in Law, who has incidentally booked a Creta as well.

One of the sales advisors mentioned that if he paid the entire amount now, i.e. a month before delivery, he could escape the higher Cess. But, this sounds like hogwash to me.

[a4anurag]

Originally Posted by abhishek46

What a co-incidence! I asked the question on behalf of my Father in Law, who has incidentally booked a Creta as well.

Congratulations in advance.

Originally Posted by abhishek46

One of the sales advisors mentioned that if he paid the entire amount now, i.e. a month before delivery, he could escape the higher Cess. But, this sounds like hogwash to me.

If that is the case, get it from them or the sales manager in writing that if the cess is hiked, you'll not be affected by it. If they do give it then I don't think anything is there to be worried.

Give it a try.

[abs182]

Originally Posted by abhishek46

What a co-incidence! I asked the question on behalf of my Father in Law, who has incidentally booked a Creta as well.

One of the sales advisors mentioned that if he paid the entire amount now, i.e. a month before delivery, he could escape the higher Cess. But, this sounds like hogwash to me.

I too am in the same boat. Paid the booking amount for my Creta Petrol AT and now waiting for the delivery. The cess hike is something that'll hit me for sure! Funnily we have 3 cretas booked!

[feluda86]

The government should start a tax credit scheme where a part of indirect taxes paid during a financial year using white non cash money (cards, wallets, net-banking etc) will be refunded /credited to an honest tax payer as a part of his ITR. Should not be difficult to track such expenses and Aadhar, PAN, ITR, accounts, credit cards etc everything is under one roof as of today.

This will help in a few ways: 1. increase non-cash transactions (which is what I believe what the government wants in the first place) 2. More accountable spending 3. More incentive to complete ITR (similar to the existing 1% TDS on cars over 10 lacs).

As already said earlier on this thread, these extra CESS defeat the purpose of "One Nation, One Tax, One GST". It seems at this point GST was only a nomenclature change in the guise of something groundbreaking. May be the policy was to keep taxes lower to create a positive acceptance mindset for consumers and increase taxes once desired level of acceptance is achieved.

[Slick]

Based on the total cars sold in that segment, roughly how much would the Government gain out of this hike (i.e. 10% over the existing 15%) ? Does anyone have any figures?

My guess is the gains are not huge, I wonder then why they made the change in the first place, antagonizing people and losing a some credibility.

This should have been avoided in the short term really.

Do correct if I am wrong.

- Slick

[jetsetgo08]

Originally Posted by abhishek46

What a co-incidence! I asked the question on behalf of my Father in Law, who has incidentally booked a Creta as well.

One of the sales advisors mentioned that if he paid the entire amount now, i.e. a month before delivery, he could escape the higher Cess. But, this sounds like hogwash to me.

I don't think it is a hogwash, all the dealer would be doing is invoice the car prior to the implementation of the additional cess. Please refer to the discussions in the other thread - Link

And it all depends on the customers relation with the dealer on what amount should one pay to get the car invoiced. Note:- A substantial amount is lost if an invoiced car is cancelled. Please check the terms and conditions with the dealer.

[volkman10]

Automakers react to the cess mess - Demands the meaning of 'Luxury' relating to the Auto segment!

https://www.youtube.com/watch?v=aFg1VK5YlYk

[samy1117]

Originally Posted by octane_100

With out meaning offense to anybody, one should realize that GST was never about reducing the indirect tax rates. It is about merging all the different forms of taxes and making a single tax and also to ensure that for a given product the tax rate is uniform across the country.


I do agree that the temporary reduction and then the sudden roll back leaves a bitter taste. But trust me, as an entrepreneur I am breathing a little easier today as harassment shall be from only one department going forward ��

In Administrative point of View, GST is a very good reform. However, the net outgo as a tax to the government has increased considerably for companies as well as for individuals. Take this example. We usually buy about Rs 10 Lakhs worth of computer goods for our office once every two months. Earlier, we used to pay tax at 5.5% flat rate. But, after GST, this tax rate stands at whooping 28%. Now, we pay 280,000 tax instead of 55,000. This has some serious impact on our operations. Government is milking certain segments in the name of taxes as there wont be any protests and it wont affect their vote banks.

This government has become too greedy and everyone feel suffocated with higher tax outgo. I wouldn't be surprised if this government voted out in the next elections due to this macro management and huge taxes in the name of reforms without any noticeable improvement in infrastructure/governance on the ground.

[imp!]

The increase in CESS is quite ludicruous, especially considering the already obscene tax component of on-road car prices; the bigger problem is going to be a ripple down effect on industry. The auto industry is one of the largest drivers of economic growth in a country like ours. With such high taxes, we will see an overall slump in demand.

There is no reason for manufacturers to continue investing in India. Glaring red tape, difficult market conditions, low productivity, ad-hoc regulatory decisions and a customer base that is becoming increasingly price-conscious given stratospheric rise in living costs. Why would they not invest in Brazil, Mexico and China for manufacturing? Indonesia, Malaysia and Thailand all offer a lot more than India does. GM did not leave because of lack of sales. They left because of these problems. Even many small family owned SMEs are looking to move their manufacturing off-shore the first opportunity they get. We are certainly in for a difficult time in this country.

GST was supposed to make things easier. In many ways it has, but, when coupled with the increase in minimum wage, a lot of lesser skilled or non skilled labourers have lost their factory jobs. There are increasing number of lay-offs in the services sector. Hospitality is going to suffer as well with the increase in rack rates and dining costs. It is not just the low-income and middle-income brakcet that is going to tighten their belts. Even high income individuals are becoming more frugal to ensure they remain rich.

[Nav-i-gator]

A bit OT here:

Increasing indirect taxes to compensate for lower collection from direct taxes is inefficient, apart from being morally wrong. While I'ma OK if Govt want to demarcate between what is affordable for masses and what is luxury by taxing differently, this cannot be a one way traffic. Govt need to introduce some "carrot" to the taxpayers also. Why not refund some part of the tax paid (or remove cess) for people who have paid their taxes? Why not refund tax paid on utility bills of Govt services/PSU (like property tax, tax on electricity connections/bills etc) as tax payers have already paid a fair share of direct taxes from their income?

Incidence of double taxation is widely debated and taken up with FM/PM by companies/industries, many a times successfully. But the same double taxation on individuals is not on anyone's radar.

I guess this govt (who was, and still is, overwhelmingly supported by the middle class salaried individuals) is fast reaching the limits of tolerance of the middle class on ever increasing tax burden

[ksameer1234]

Originally Posted by Nav-i-gator

this cannot be a one way traffic. Govt need to introduce some "carrot" to the taxpayers also.

Exactly. The effort should have been to penalise / tax those who evade direct taxes. In that sense, the 1% TCS was a good approach since it encouraged coming into IT ambit and penalised those who didn't. A 1% TCS per 10 lakh ex-showroom price above 10 lakh would have brought in money to government from tax evaders while being an appropriate carrot for honest.

Also, I don't think this cess is temporary. So effectively, GST has become another way of increasing the taxation. And whatever else increased in past two months in the name of revenue loss due to GST would also stay!!

I was in Malaysia last month and the GST appears to be flat 6% on everything. Needless to say, the vacation was significantly cheaper than what would have been anywhere in India.

[nitinralli]

GST, Indian version of GOT (Game of Thrones). Everyone has his own theory

I too was looking for new wheels as my 6 year old XUV is getting old. But now with this new tax slab, i would have to churn out more or go with lower segment car.

[Nav-i-gator]

Originally Posted by ksameer1234

Also, I don't think this cess is temporary. So effectively, GST has become another way of increasing the taxation. And whatever else increased in past two months in the name of revenue loss due to GST would also stay!!

.

This Govt appears to be working for the "KPI's". GDP growth rate, inflation, current account deficit, fiscal deficit, reduced direct subsidies, credit ratings etc have taken precedence over what is actually felt by an individual in their daily lives.

And while working for the poor and deprived should be the top priority of any Govt, it should not show being "not-poor" in bad light. Being wealthy is seen as "being open to flogging" by this govt.

[Yeldo]

Originally Posted by Nav-i-gator

Why not refund some part of the tax paid ... for people who have paid their taxes? Why not refund tax paid on utility bills of Govt services/PSU ... as tax payers have already paid a fair share of direct taxes from their income?

That is not double taxation. Double taxation is taxing a taxable event twice. Direct tax is what you pay on income, and indirect tax is what you pay when you spend that income. Both are different.

Originally Posted by Nav-i-gator

... But the same double taxation on individuals is not on anyone's radar.

Individuals too are entitled to tax credits for any direct taxes they suffer on their incomes.

Originally Posted by Nav-i-gator

govt ... is fast reaching the limits of tolerance of the middle class on ever increasing tax burden

Couldn't agree more. Tax component in most modern day democracies are well beyond levels of reasonable burden.

Originally Posted by ksameer1234

... In that sense, the 1% TCS was a good approach

I agree. I would even say that the TCS on any vehicle should be equivalent to the tax slab levied on the income bracket which its price falls in.

( Sorry for being so grossly )