[Aroy]

Originally Posted by nipunkul

Indians will try to find ways to evade this tax as long as their is a loophole. Some farmers in the US have been registering their Audi's as farm equipment in the same vein (news in autoblog.com today).

The same farmers also show the houses and lawns as farms (In US only actual land where farming is carried out is tax exempt, all other lands are taxed).

It is human nature to "avoid" taxes, and whole industry is built around giving advise on "how to pay less tax".

So as I had said in past reply, once subsidies are withdrawn there is no misuse. As far as helping the poor, there are many other methods, one of the more prevalent and equitable methods is to have more direct taxes and less indirect taxes as in the US. Actually indirect taxes like excise and sales tax, affect the poor non-tax payer more than the riches strata of the society.

[wildsdi5530]

Originally Posted by nipunkul

So then if we tax all white plate registered cars at say 10% of ex. showroom, there is a new problem, where businessmen will register their personal use cars in yellow plates in the name of their businesses. Company leased cars will all be registered yellow. Same for any other private citizen having links to acquiring a business address.

So basically you are saying that private middle class people who have aspired to own a car and finally buy one after much penny pinching will have to pay an additional 10% tax. (The present road tax + regn is about 10% of ex-showroom, not considering excise, octroi, other duties at various stages of manufacture and sales tax which will make up about 50% totally). He should have stuck to his motorcycle to transport wife and 3 kids.
But the business magnate who makes money every kilometer the vehicle is run should pay less tax?
Also consider usage patterns. Does anyone have reliable data of percentage usage of diesel by private cars. It must be less than 1% of the total diesel procured by India. Now cutting the subsidy for this small percentage will not give the amazing benefits to the economy that everyone dreams of. We are missing the forest for the trees.

[nipunkul]

Originally Posted by wildsdi5530

So basically you are saying that private middle class people who have aspired to own a car and finally buy one after much penny pinching will have to pay an additional 10% tax.

It is not what I am saying, it is the dilemma of the govt if they choose any other option but to wipe out subsidies. As you said the one time tax hurts the middle class salaried Guy the worst. If you read my full post I am arguing against such a tax.

[channelv]

Finance Ministry sources said that the ministry may consider hike in excise duty on diesel run cars. The 3-Tier excise hike on diesel cars may be looked at. The hike will be of Rs 20,000-Rs 50,000 & Rs 70,000 depending on the size of the car. Final decision will be taken in consultation with the Prime Minister. However, the hike is unlikely if economy starts looking up and revenues improve, sources added, reports CNBC-TV18

The move would only hurt the Auto industry further which is going through a bad phase thanks to hike in petrol prices and interest rates.

[shuvc]

Will it really hurt the Auto industry too much? People who are planning to buy a car would anyway do so. I don't think a 20K to 70K increase (presumably for small to big cars) would deter them much.

Overall petrol cars might start selling a bit more than their diesel counterparts.

[Suess]

later they will increasae the price of diesel, when enough cars has been sold out! this way Car manufacturers, oil companies and Govt. all will be happy.

[hdnivara]

This should have been done years ago!
The subsidy given (on fuel) for diesel car owners is unjustified.

And this might make Honda breathe

[rajeev k]

With passenger cars consuming about 15 per cent of the diesel, the Government today indicated that it might do away with the subsidy enjoyed by diesel car owners.The Finance Minister said that a mechanism would be found out so that this section (diesel car owners) are not subsidised.

[mpksuhas]

As if news on increasing of Insurance for diesel vehicles wasn't bad enough
( http://www.team-bhp.com/forum/indian...ars-go-up.html ) there is a flash news in diffrent websites that govt is planning of removing subsidy entirely for diesel cars.
When its going to be implemented and how it can be monitored is left out as of now. Entire news at Car owners may soon have to pay more for diesel - NDTV Profit

[selfdrive]

^^ IMHO if they want to remove the subsidy, they should also abolish all the different taxes that are levied on both petrol and diesel right from central to local level.

[StarrySky]

Great! My next purchase will be a run-down bus - just to get myself cheaper diesel

Originally Posted by asr245

Not sure how they are going to implement this. Maybe they sell diesel at market rate in all metros.

Maybe the fuel stations will have separate dispensers for private vehicles.

[asr245]

here's a link from ET

Car owners may not get subsidised diesel: Government - The Economic Times

Not sure how they are going to implement this. Maybe they sell diesel at market rate in all metros.

[Positron]

If anyone is wondering how they have different diesels for agricultural purpose and for private cars in UK and Ireland - what they do is, they sell two types of diesel.

Normal Diesel at usual outlets. And special, cheaper, agricultural diesel for agricultural use - this would have a dye mixed in.

Every now and then customers / revenue would have road side spot checks and they will stop diesel cars / trucks and test the contents of the tank by inserting a test rod/tissue that will show up the dye. If dye is present, they are done for fraud. It's that simple.

We already dye kerosine sold for domestic use there in India - so the technology exists.

[cingsman]

Yes, I read that too. Neutrally speaking, it is about time!! (Nothing against diesel owners, but it just burns my petrol heart to see my tax money going into some individual's fuel tank) More than 33% of new car sales are now diesel powered cars - and the ratio will only keep on increasing until there is any change in the existing pricing system.

Then again, I doubt the pricing system will change this soon with all the decision makers being driven around in premium diesel Beemers and diesel Mercs - although they do not pay out of their own pocket !!

If the pricing does not change, I am hopping onto the diesel bandwagon next year!

[DieselFan]

Originally Posted by shuvc

Will it really hurt the Auto industry too much? People who are planning to buy a car would anyway do so. I don't think a 20K to 70K increase (presumably for small to big cars) would deter them much.

Overall petrol cars might start selling a bit more than their diesel counterparts.

Not really. You have seen how increase in petrol prices affected Honda sales. There will be similar impact when there is a hike in Car prices. People will postpone purchases as well as choose alternative mode of transport.