[msdivy]

Urban Development Ministry has proposed a cess for 2nd car in cities. By this they aim to achieve:
1. Control traffic congestion in cities
2. Popularising public transport
Buying process will be monitored by RTO.

They are meeting on April 14 to discuss this.

Your second car may be costlier
RAJAT GUHA & MAYUR SHEKHAR JHA

You may have to pay tax on the second car you buy. The urban development ministry has proposed that every second car in a household will attract a cess over and above road tax and value-added tax (VAT).

The proposal—a major dampener to car owners in metros like Delhi and Mumbai, where 20-30 lakh cars ply—is currently being deliberated by state governments. State secretaries are slated to meet on April 14 in this regard. The ministry has proposed a cess of 2-3% but a final call on the rate will be taken at the state level.

Incidentally, the government thinks the proposal will help meet its two long-term objectives—curbing usage of private vehicles to control traffic congestion in cities and popularising public transport. “It has been proposed to collect the tax and pump it into a special fund, which would in turn be invested in high-capacity buses for public transport,” a senior government official said.

Hence a change of routine may now await a person wanting to buy a car. The city registration office, during registration, would duly check whether it is the first purchase. Sources say it would not be easy to get around the law as the matter would be investigated at the RTO itself.

Incidentally, the Delhi government is learnt to have been considering the proposal for levying the tax for car buyers in the city. “We have already created a dedicated multi-modal transport special purpose vehicle to invest in the high-quality transport system in the state in the wake of Commonwealth Games 2010,” a senior Delhi government official said.

Similarly, the Haryana government is also mooting a same proposal as the state has outlined many transport development programmes, including a large metro link.

“The need to explore various alternatives to control congestion by ever increasing number of private vehicles has been voiced on many forums. The problem is particularly critical in the national capital region (NCR). It is broadly felt that it can be addressed by incentivising use of public transport and at the same time disincentivising purchase of private vehicles than required,” Haryana transport minister Randeep Singh Surjewala said.

Source: Your second car may be costlier-Tax News-Tax Centre-Money Matters-The Economic Times

[goldie_malhotra]

Good move, but I think people will start registering their second/third cars in the names of other family members. In fact, some may already be doing this to avoid tax.

[ajitkommini]

Let me see if I understand this policy correctly:

Step 1: Tax owners of second cars (people who are probably not going to use public transport very much).

Step 2: Invest money from step 1 in new, more expensive hi-tech buses (which probably wont be used by cost conscious users of public transport).

Hmm.... another smart idea,

[sreedotk]

There are lot of interwined Govt Agencies that are acting as watch dogs including the Income Tax department. I belive car owners are under the IT department watch for Tax filing along with new home purchasers. It means more paperwork and more department loop holes to clog

[madan80]

Originally Posted by ajitkommini

Let me see if I understand this policy correctly:

Step 1: Tax owners of second cars (people who are probably not going to use public transport very much).

Step 2: Invest money from step 1 in new, more expensive hi-tech buses (which probably wont be used by cost conscious users of public transport).

Hmm.... another smart idea,

Hmm.... another smart idea,
well. in a "nut"shell, yeah!

[spadival]

They will tax everyone to death.. I believe the cess they imposed on petrol during the First Gulf war is still in place.

First let them do something about the fountain head of corruption - RTO.

[tsk1979]

So all the RTO can check is that wether the house on which the car is being registered has another car registered at that place.
With many buyers living in rented houses, this is going to be a nightmare, and a bumper opportunity for the Babu's to rake in more money.
Such policy decisions remind me of a famous middle ages ruler, the one who moved the capitol from Delhi to somewhere central and then ordered all the people to move too. He is also credited with being responsible for first historically documented instance in India of counterfeit money making the economy going haywire.
2-3% extra tax on second car is not going to deter a second car buyer. Did the interest rate rise from 9% to 15% lead to lesser car sales?
Neither is this extra tax going to make much difference to the already astronomical amounts being given in name of taxes.

[Sush]

Originally Posted by tsk1979

Such policy decisions remind me of a famous middle ages ruler, the one who moved the capitol from Delhi to somewhere central and then ordered all the people to move too. He is also credited with being responsible for first historically documented instance in India of counterfeit money making the economy going haywire.

I think that ruler was Alaudin khilji :-)

[msdivy]

Originally Posted by Sush

I think that ruler was Alaudin khilji :-)

How can anybody forget, its Muhammad bin Tughluq

[Sush]

I guess you are right msdivy :-)

Its cool that instead of vintage cars we are mentioning vintage rulers on the forum.. :-)

[greatDrive]

source
Your second car may be costlier-Tax News-Tax Centre-Money Matters-The Economic Times

You may have to pay tax on the second car you buy. The urban development ministry has proposed that every second car in a household will attract a cess over and above road tax and value-added tax (VAT).

The proposal—a major dampener to car owners in metros like Delhi and Mumbai, where 20-30 lakh cars ply—is currently being deliberated by state governments. State secretaries are slated to meet on April 14 in this regard. The ministry has proposed a cess of 2-3% but a final call on the rate will be taken at the state level.

Incidentally, the government thinks the proposal will help meet its two long-term objectives—curbing usage of private vehicles to control traffic congestion in cities and popularising public transport. “It has been proposed to collect the tax and pump it into a special fund, which would in turn be invested in high-capacity buses for public transport,” a senior government official said.

Hence a change of routine may now await a person wanting to buy a car. The city registration office, during registration, would duly check whether it is the first purchase. Sources say it would not be easy to get around the law as the matter would be investigated at the RTO itself.

Incidentally, the Delhi government is learnt to have been considering the proposal for levying the tax for car buyers in the city. “We have already created a dedicated multi-modal transport special purpose vehicle to invest in the high-quality transport system in the state in the wake of Commonwealth Games 2010,” a senior Delhi government official said.

Similarly, the Haryana government is also mooting a same proposal as the state has outlined many transport development programmes, including a large metro link.

“The need to explore various alternatives to control congestion by ever increasing number of private vehicles has been voiced on many forums. The problem is particularly critical in the national capital region (NCR). It is broadly felt that it can be addressed by incentivising use of public transport and at the same time disincentivising purchase of private vehicles than required,” Haryana transport minister Randeep Singh Surjewala said

[Ram]

Originally Posted by msdivy

Urban Development Ministry has proposed a cess for 2nd car in cities. By this they aim to achieve:
1. Control traffic congestion in cities
2. Popularising public transport
Buying process will be monitored by RTO.

They are meeting on April 14 to discuss this.

Source: Your second car may be costlier-Tax News-Tax Centre-Money Matters-The Economic Times

May I articulate why it is a stupid move?

Even if I have a dozen cars, I can only be in one at a time. The rest will be locked up inside my garages. So I don't contribute to traffic congestion anyway.

And even if my relatives are driving some of my cars on the street. I would not take the public transport if I have even one car free.
So the public transport won't get my rupee anyway.

The buying process is anyway monitored by the RTO, is it not?
When I buy a new or used car, I have to register my ownership with the RTO. If they sleep through their opportunity to check malpractices, no new move can wake them up.

Opinions?

Ram

[hmishra83]

I agree with Ram. I dont see a positive impact of this towards any developmental cause.

[ajmat]

Originally Posted by ram

Even if I have a dozen cars, I can only be in one at a time. The rest will be locked up inside my garages. So I don't contribute to traffic congestion anyway.

So much so that in Switzerland, you can have several cars on one numberplate. Only thing is that only one car must be used at a time

[1100D]

Originally Posted by ajmat

So much so that in Switzerland, you can have several cars on one numberplate. Only thing is that only one car must be used at a time

They call it the License plate, mainly because each licensed driver has his own plate and has to put it on any car he is driving. (May or maynot be his own). Car registration is a separate thing.