[Siddarth_Ramani]

At a glance it looked like 'Life Tax increased'. At this rate we are not far away from paying taxes for just breathing.
I see a business potential from this. "Mr. Siddarth we at Breathless pvt ltd offer products that reduce your oxygen bill upto 30%"
On a side note, does anyone know how to approach Shark tank India? This might actually get funded.

[anshu1101]

Originally Posted by Vid6639

The 2nd car having 2% will be a nightmare since that would mean anyone selling the first car has to ensure the transfer is done before buying a new car to save that 2% and we all know the process and time needed for RTO to update ownership transfer.

This rule is already in place for many years now, and it is applicable even if you have a 2-wheeler registered in your name already, and not just a car.

In 2013, I had to pay 2% additional road tax when I bought my Vento, as I already had my Honda Unicorn registered in my name. This rule is plain ridiculous.

[souvikjana83]

If one buys the XUV700 AX7 in Himachal, it will cost ₹23.2 lakhs on road price. But if the same is bought in Bangalore or Hyderabad, it will cost ₹26.5 lakhs.

That's a whopping difference of ₹3.3 lakhs. That's just stupid.

Telangana government is continuously raising taxes on both property purchase and motor vehicles. Its like they are adamant on squeezing as much money as possible from the middle class just because they can earn.

One nation one tax will always remain a dream unless a single government is not there in center as well as state. Let the tax be max at 18%. But it shouldn't differ from state to state. Same should be the case of taxes on fuel as well.

[MT_Hyderabad]

Desparate effort from Telangana government to make money before disruptive changes are introduced in the MV Act due to technological advancements.
Soon gps enabled toll tax will be introduced.
On similar lines, road tax should also be calculated on the actual distance covered by a car on state roads.
In the present system a car covering 2 lakh kms in 5 years is taxed similarly as another car that travels just 20k kms in 5 years.
Moreover, these slabs push people to find ways to reduce the tax burden. It will be easier for one to change ownership of a previously owned vehicle and get this new vehicle at 12% slab and later transfer the ownership back, as there is no taxation if the ownership is changed. The taxes are applicable only for first purchase.
The taxation is on vehicle ownership, if I own a motorcycle, I will pay 2% more tax if I buy a car. Sorry, I will either get the car in my family member's name, or will transfer the motorcycle's ownership before buying a vehicle in my name.
Talking of technological advancements, if my car is fitted with a GPS device that measures my speed, it will be so easy to challan me for doing an occasional 50 in a 40 km/h speed limit zone. Yes, in Hyderabad people are fined for going above 40 on many roads, I was fined too, believe me, I was still doing 48 to 50 on that road as it is nearly impossible to drive at less than 40 km/h. Two three challans of this sort and I will face driving license cancellation.

[punto_]

I narrowly missed the hike in taxes. I was hearing about these hikes coming in and tried to get the car before the hikes which worked luckily.

These taxes are getting out of hand! I wish the facilities available for us will be on par to the taxes being paid, one can only dream!

[pavanmadhini]

The tax on tax is insane. Road tax on GST component of the car’s ex-showroom price makes no sense. I can understand why some people say taxation is theft.

If the taxes keep increasing, won’t this eventually curtail the growth potential of the auto industry? People will just stop or decrease their spending on cars.

[manub22]

Originally Posted by GreasyCarb55

And another masterstroke by the government (sarcasm) pushing me towards motorcycles and used cars, with governments pushing high taxes on both cars and the fuel most of them need to run on I feel like it's best to invest my money into motorcycles (if I'm looking for speed) and keeping an old Baleno/Esteem swapped Zen as a project car.

Not even a motorcycle, one has to switch to a Bicycle instead, considering the ever-increasing fule hike and now road-tax hike. Will save on money as well as will be good for health.

But do we have good dedicated sidewalks/tracks to run bicycles from different parts of Hyderabad city to THE downtown (HitechCity & Gachibowli)?

Originally Posted by souvikjana83

If one buys the XUV700 AX7 in Himachal, it will cost ₹23.2 lakhs on road price. But if the same is bought in Bangalore or Hyderabad, it will cost ₹26.5 lakhs.

Not only in HP but in Uttarakhand road tax is just 6% and 8% for 10 Lac and >=20 Lac respectively.

Don't understand why our govt is hellbent on sucking people's money in one way and cursing the NPA/Center govt for petrol price hike at the same time !!!

[souvikjana83]

Originally Posted by pavanmadhini

If the taxes keep increasing, won’t this eventually curtail the growth potential of the auto industry? People will just stop or decrease their spending on cars.

Not really, because Govt know "Shauk badi cheez hai".. A person who has decided to buy a ₹20 lakhs vehicle will not change their decision in paying the additional ₹60-80k.

People may negotiate at dealer level to reduce the price as much as possible. But for popular models like XUV700 or Creta or Seltos even that won't be possible at all.

[shyampsunder]

Originally Posted by pavanmadhini

If the taxes keep increasing, won’t this eventually curtail the growth potential of the auto industry? People will just stop or decrease their spending on cars.

Why do you think vehicle sales India has flatlined for the past 5 to 10 years? Anecdotally you can say person buying 20L car is not going to bother with another 80k but empirically that has proven to be false when it comes to purchases which are not essential.

Only in case of essential goods like petrol or food do tax increases have negligible impact on sales. That's also the reason why all major countries tax petrol.

In the case of discretionary purchases like vehicles it has been proven that every 1% increase in tax has a much bigger impact on sales. Govt will make more money through taxes but at the impact of reduced auto sales revenue.

If you want to read more about the research behind this, Google "Ramsey law of taxation".

I also wrote a Twitter thread on this sometime ago.link

[TheOperator]

Originally Posted by vamship

It still doesn't touch Karnataka, as it has additional 11% cess on the road tax paid, which makes effective tax for 10 L - 20 L as 18.5 %

Originally Posted by anshu1101

This rule is already in place for many years now, and it is applicable even if you have a 2-wheeler registered in your name already, and not just a car.

In 2013, I had to pay 2% additional road tax when I bought my Vento, as I already had my Honda Unicorn registered in my name. This rule is plain ridiculous.

I also had a 2-wheeler registered on my name when I bought my car but I only paid 14% road tax (>10 lakh category) and nothing extra. Are you sure 2-wheeler are counted as 1st vehicle because it did not count for me.

[RunGaDa]

We are hell bent on giving everyone a “Feel bad factor” experience. Frankly feel the governments - state and centre are completely out of ideas in trying out anything sustainable and sensible income, only tax more.
But ask them about not using cars for official and personal purposes, they will use the law against you. Not very long ago Telangana govt procured high end Innova Crystas for its IAS officers, in addition to the hundreds of Toyota Fortuners with all fancy number plates. For everything the tax payer is paying.
It sickens me when I am driving and some “flag” car goes past.

[souvikjana83]

Originally Posted by shyampsunder

In the case of discretionary purchases like vehicles it has been proven that every 1% increase in tax has a much bigger impact on sales. Govt will make more money through taxes but at the impact of reduced auto sales revenue.

If you want to read more about the research behind this, Google "Ramsey law of taxation".

IMHO this will be true in case of sale of small/medium cars since there are budget constraints associated with these purchases.

However when people are able to afford cars with on road price > ₹15 lakhs, the equation changed tremendously and an increase of 2-3% is not going to change people from going ahead with their purchase. For people from middle class, there will be car loans associated with the same and that means it will be an EMI increase of few hundreds. And for people from the rich/elite upper class, it doesn't matter anyway.

[shyampsunder]

Originally Posted by souvikjana83

IMHO this will be true in case of sale of small/medium cars since there are budget constraints associated with these purchases.

However when people are able to afford cars with on road price > ₹15 lakhs, the equation changed tremendously and an increase of 2-3% is not going to change people from going ahead with their purchase. For people from middle class, there will be car loans associated with the same and that means it will be an EMI increase of few hundreds. And for people from the rich/elite upper class, it doesn't matter anyway.

Partially agree with you. The only place where I disagree is that cut off of Rs 15 lakhs, many people buying at these prices are seriously stretching their budget from 10L to move to the next segment. This is why manufacturers set the base model price at low levels to invite these people to upgrade.

I would say 50L+ is the range where a 2%-3% is not going to matter because people buying cars at that level are spending a small fraction of their net worth to buy a car. We can actually see this effect at play by looking at how luxury automakers and even Toyota gets to keep increasing prices without any impact on their yearly sales.

[pavanmadhini]

Originally Posted by souvikjana83

Not really, because Govt know "Shauk badi cheez hai".. A person who has decided to buy a ₹20 lakhs vehicle will not change their decision in paying the additional ₹60-80k.

People may negotiate at dealer level to reduce the price as much as possible. But for popular models like XUV700 or Creta or Seltos even that won't be possible at all.

My point was slightly different - it curtails the growth potential of the industry. This kind of taxation will severely limit the growth of first time car buyers. I wonder how many more cars would have been bought had the taxes been more reasonable. That would have also had some more positive downstream impact for the economy.

[apachelongbow]

Politicians and babus think of extorting money in the form of taxes. Most of these people don't have a vision or a plan on how to move the state's economy. Post covid they think by increasing taxes and tolls they can feed their government.