[sunikkat]

Originally Posted by Jangra

So why this post?
1) Of the 43lacs I paid, only 24lacs gets in Skoda's pocket, want to know from other members if they feel its fair?
2) help someone who is unaware that ex-showroom cost consists of 48% taxes already]

Glad you stopped the calculation there, if you go a step further and start calculating the petrol costs and tax that one pay, you will save money to buy another 3 series in the useful life of Kodiaq

Unfortunately we salaried class have no options

[Turbohead]

What else did you expect when we car buyers are at the top 10% of the population?

If you really, really care about how your tax money is being used, move abroad to a car friendly nation. Staying back in hope of things to get better has a higher chance of disappointing you. I'd be glad to be proven wrong though.

[Yeldo]

While I am in agreement with the general anguish over higher tax outgo that the salaried car buyers are made suffer, I would like to humbly point it out that taxes on income and taxes on consumption are basically different from the point of view of public economics. Consumption, especially like that of cars, is discretionary in nature, and you have to suffer a higher tax only if you elect to do so. Higher taxes are necessary to reduce the effects of inequalities in income. They are a matter of policy for every major democracy, so as to ensure fewer disruptions in the society.

As some esteemed members here have pointed out, purchasing cars through companies by many business owners enjoys certain tax advantages at present. But I think the Union Finance Ministry would look into this gap very soon, and introduce adequate provisions in one of the Union Budgets. The current Government had introduced 37% surcharge on the upper brackets of personal income tax some time before, which closed the gap between income received directly and income received as dividends which suffer multiple layers of tax. Sooner or later, many such anomalies and opportunities are sure to get identified and eliminated.

(I am aware that this comment would be extremely unpopular here, but sorry, that's how taxation economics works.)

[warrioraks]

Originally Posted by Jangra

Yes, you heard that right!

I hear you buddy and echo the pain. Surprisingly, this is despite a powerful auto lobby who would love to see tax on vehicles going down.

So till the time the salaried individuals are able to impact important metrics like ease of doing business and all other fancy things world rates our country on, we have no choice but to grin and bear it.

[denzdm]

I just read this today. As per 2012 RTI filing, there were 8 lakh people with more than 1 crore in agriculture income, who paid zero taxes in India. 1% of Indian farmers own more than 10 hectares of land and by no standards are they poor. And, also as per a paper by erstwhile Planning Commission, if we could even tax 0.04% richest farmers, it would generate 50,000 crore of tax gains. Not being against farmers here, but it's about getting the rich to pay their fair due.

It doesn't make sense for a corporate employee even making 25K per month to carry the burden of taxes while crorepati farmers accumulate or splurge.

So, the sad story is certain factions continue to pay through the nose while some go scot free (literally).

[rageshgr]

Yes. I always say the same.

Most cars above 10 lacs will entail around 100% tax.

That is. If the ex factory price is X. Then you will have to earn 2X pre tax to afford. X goes as tax. That too it’s compund taxation. Because. After adding GST to the ex factory, you get ex showroom. And then RT is calculated on this which already has GST. So there is tax + tax on tax as well.

And don’t get me started on petrol. In 100 rupees, 70 rupees is tax.

[livelyyoungman]

It is not a surprise at all that we are in a taxing economy. None at the helm want to provide relief in that area. Mafia all around.

Originally Posted by denzdm

I just read this today. As per 2012 RTI filing, there were 8 lakh people with more than 1 crore in agriculture income, who paid zero taxes in India.

This is the state in 2012. Ten years later, this would have grown by at least a few percentage points. The folks at the helm are always blind to these.

[ValarMorghulis]

Originally Posted by denzdm

I just read this today. As per 2012 RTI filing, there were 8 lakh people with more than 1 crore in agriculture income, who paid zero taxes in India. 1% of Indian farmers own more than 10 hectares of land and by no standards are they poor. And, also as per a paper by erstwhile Planning Commission, if we could even tax 0.04% richest farmers, it would generate 50,000 crore of tax gains....while crorepati farmers accumulate or splurge...

Originally Posted by livelyyoungman

This is the state in 2012. Ten years later, this would have grown by at least a few percentage points. The folks at the helm are always blind to these.

OT: While trying not to turn this in to a political thread, agricultural income can't be taxed by the central government as per the section 10(1) of the Income Tax Act of India. Only state governments can do so.
But looking at the populist state governments (free electricity, free monthly money, etc.), this isn't going to happen any time soon.

Coming back to topic, to be in the top 1% of earners in India, it requires one to earn around INR 55 lakhs per annum according to an article by Bloomberg on 07-Feb-2020.

tl;dr We are a poor nation, where the bottom 50% earns an average of INR 53,000 per annum and until there are more folks earning much better (or until the crorepati farmers are brought under the tax net), atrocious taxation on the 1% will continue. I'm just surprised that we are still surprised at high levels of taxation.

[deehunk]

Owning a Skoda Kodiaq is one thing but how often can I take out this car for a long drive on a heavily tolled highway with the fuel price competing against the top speed of my car? My friend who owns a fleet of luxury cars is also feeling the heat of fuel price and prefers to use his 2007 Swift VDI.

[binand]

Originally Posted by ValarMorghulis

agricultural income can't be taxed by the central government as per the section 10(1) of the Income Tax Act of India. Only state governments can do so.

To be pedantic about it: the 7th schedule has "taxes on income other than agricultural income" in the Union list and "taxes on agricultural income" in the State list.

There is no hope of this situation changing in our lifetimes.

[Amey Kulkarni]

Originally Posted by Jangra

So basically only 57% of the total amount was received by SKODA!

Thanks for sharing this. Although its not good news.

While this is all correct, AFAIK, Ex-showroom costs also include the margin for the Car Dealer which means the actual amount going to SKODA is lesser.

Ex-showroom price - NDP (Net Dealer Price) = Margins for the Car Dealer

The calculations in tax is correct the way you're looking at it however, one more point to note is that this is exaggerated in case of SUVs only. The Cess on Sedans and Hatch is much lesser keeping in mind that it is still is high when you consider the returns we as citizens are getting.

Cheers,
Amey

[EV NXT]

1. It’s not just a Kodiaq, if you buy a BMW for 63.50 lakhs in Bangalore, your actual payout is Rs.1 Crore.

2. If you pay a food bill for 6500 at a 5 star hotel you’ve actually paid 10,000/-.

3. If you buy a flat for Rs. 2 crores you’re actually paying out Rs. 3.05 Crores!!

Money that you have in hand is only 65% of what you earn so extrapolate that to every area. Add GST and the pain is more.

It’s better not to get into this calculation mode as one would regret every purchase.

[d3mon]

You can't include income tax in this calculation.

You pay income tax before you receive your salary, or when you turn a profit (if you're a businessman).

Regardless of whether you choose to spend this remaining money on a car or not, that income tax is never coming back. So it makes no sense to add it to the cost of a car.

Source: An equally disgruntled tax-paying-through-the-nose salaried employee

[Jangra]

Originally Posted by sridhar-v

In Purchasing Power Parity terms you have paid 60.8/6 = 10.13 Lakh US$.

So cheer up. Yor are driving around in a $1 million car. Very few folks in the west can afford that!!

Originally Posted by 2000rpm

If the government is not giving any relaxation on Petrol, which impacts even the common man, expecting relief on something as premium as Kodiaq is being Naive.

Neither I was demanding any relief. My main concern is SKODA who designed this product got so little piece of the pie.

Originally Posted by Turbohead

If you really, really care about how your tax money is being used, move abroad to a car friendly nation.

Not sure what you mean. I'm just highlighting an issue. I never knew Ex-showroom included 48% of Tax in car of this category. Even other fellow member highlighted that a Kushaq - a made in India car, costed him to pay 6 lacs to the govt. for a car price of 9lacs. Thats 67% for a made in India car!

I'm not moving to US just because iPhone costs half the price there!

Originally Posted by denzdm

I just read this today. As per 2012 RTI filing, there were 8 lakh people with more than 1 crore in agriculture income, who paid zero taxes in India.

This is my personal opinion that the agriculture sector income should remain tax free. How else can we motivate people a farmer - rich or poor? This should remain a top priority towards the self sustaining India

Originally Posted by Amey Kulkarni

Ex-showroom price - NDP (Net Dealer Price) = Margins for the Car Dealer

Ouch! for SKODA. Its one thing to make less profit on each car when you're a mass producer like Maruti. Kodiaq - barely 1200units a year, no wonder they are not bothered to take more bookings.

Originally Posted by d3mon

You can't include income tax in this calculation.

Source: An equally disgruntled tax-paying-through-the-nose salaried employee

Though I agree, technically it is correct to include OR call it a grey area

[prajwalmr62]

In India, you don't buy a car, you buy the privilege to roam around in a car. Car is just a side-product.

---

Originally Posted by Vid6639

So truly speaking no point in complaining about these luxury SUV's having huge taxes as the govt clearly wants the people who can afford to pay maximum taxes for them to make the cheaper cars easier to buy for the mass population. On top of it the promotion is towards EV's.

Well, "cheaper" car has 29% GST, ~10% road tax, and tax on insurance.
"not-so-cheap" cars have ~50% tax and ~20% road tax.
"Luxury" cars have 50% tax and ~20% road tax.

Wait until EV becomes cheaper, government is just waiting like a hungry tiger to tax the CO2 out of it.