Bangalore Road Tax calculation for new vehicle

marathp · 25th July 2009, 16:42

Hi -

I was discussing with a Maruti dealer on the OTR of the car. He is giving a discount on current ex-showroom value, but Road Tax is calculated on the original value before discount. As per him, they have provided the cost to RTO and hence irrespective of the vehicle cost to me, road tax is same. Is it justifiable? RTO website states that cost of the vehicle is the invoice value provided by the manufacturer or dealer, but the dealer says different. I will be loosing 6-7 K if I go by dealer version. Can you guys suggest on how to go about it?

Even insurance premium is calculated by Maruti is based on the ex-showroom value, not on the discounted value. Anybody can shed more light on this? Banglore tax % is 14.5% approx.

marathp · 26th July 2009, 16:43

Wonder why there is no response to this post..? Any comments from prospective buyers?

StarVegabond · 26th July 2009, 16:48

My suggetion is to negotiate with the dealer

edassery · 26th July 2009, 17:22

The calculation, as I understand, is as follows:

The ex-showroom price = manufacturer's price + 12.5% VAT

Since the above price is fixed, the discount is usually given on the On Road price (which include registration charges, road tax etc). It's a little bit unfair, but I guess, no company will change the ex-showroom price or offer discounts on that.

The road-tax is 12% (of the ex-showroom price) for vehicles below 10L in ex-showroom price and 17% for that above 10L. For example, an Altis J with 9.8L ex-price and Altis G with 10.98L as ex-price has a difference of more than 60K in road tax! It's really unfair.

Most of the RTO taxing, cess etc in Bangalore are horrible especially when they don't do anything about the road!

marathp · 26th July 2009, 21:47

Quote:

Originally Posted by edassery

The calculation, as I understand, is as follows:

The ex-showroom price = manufacturer's price + 12.5% VAT

Since the above price is fixed, the discount is usually given on the On Road price (which include registration charges, road tax etc). It's a little bit unfair, but I guess, no company will change the ex-showroom price or offer discounts on that.

The road-tax is 12% (of the ex-showroom price) for vehicles below 10L in ex-showroom price and 17% for that above 10L. For example, an Altis J with 9.8L ex-price and Altis G with 10.98L as ex-price has a difference of more than 60K in road tax! It's really unfair.

Most of the RTO taxing, cess etc in Bangalore are horrible especially when they don't do anything about the road!

RTO website says that tax is on cost of the vehicle, which is the invoice value (including all taxes) provided by the dealer or manufacturer. So how can it be fixed? Even for a vehicle brought from other state, tax is calculated on the invoice value, so how it is different for a new vehicle? I guess nobody is questioning this and hence RTO and dealers together are taking advantage of the customer. Bangalore road tax including cess tax is 14.4% for a vehicle over 5 L and below 10 L.

HappyWheels · 26th July 2009, 22:44

The ex-factory price is decided by the manufacturer and will include the cost of transportation of the vehicle to the location of the dealer, hence the difference.

And this cost is billed to the dealer by the manufacturer. So, not change to that. And you cannot negotiate on that, since that will give a loop hole for all to exploit.

marathp · 27th July 2009, 09:27

Quote:

Originally Posted by HappyWheels

The ex-factory price is decided by the manufacturer and will include the cost of transportation of the vehicle to the location of the dealer, hence the difference.

And this cost is billed to the dealer by the manufacturer. So, not change to that. And you cannot negotiate on that, since that will give a loop hole for all to exploit.

HappyWheels - Tax is not on ex-factory, it is on ex-showroom. ex-showroom will include the taxes, cost of transportation etc. ex-factory will not have those.
Here's what i have seen regarding cost of vehicle in RTO website. Can someone help to interpret it? To me it looks like the invoice amount I paid for the car.

Cost of the vehicle in relation to a motor vehicle means –
(a) In respect of a vehicle manufactured in India, cost of the vehicle as per the purchase invoice issued either by the manufacturer or by the dealer of the vehicle including the excise duty, sales tax, surcharge or cess, entry tax etc., as payable in the State of Karnataka;

anujmishra · 27th July 2009, 09:57

Quote:

Originally Posted by marathp

Cost of the vehicle in relation to a motor vehicle means –
(a) In respect of a vehicle manufactured in India, cost of the vehicle as per the purchase invoice issued either by the manufacturer or by the dealer of the vehicle including the excise duty, sales tax, surcharge or cess, entry tax etc., as payable in the State of Karnataka;

So we all Bangalore owners paying Tax on tax on tax and so on. We are paying road tax on Sales Tax, Entry tax, Excise duty, surcharge also include tax paid by manufacturer that also adds to it. So equation is like

Manufacturing Cost + Manufacturer Tax = Ex Factory Cost

ExFactory + Sales Tax + Entry Tax + Surcharge + Entry Tax + ... + = Ex Showroom Cost
ExShowroom Cost + Road Tax + Cess = What we have to pay

The one at end is cheated is no one except the consumer like us.

amitk26 · 27th July 2009, 10:03

Whatever you say is right but this is one more case of official cheating by greedy state government .

Karnataka state is lot greedy in matters of taxation as compared to other states of Indian Union ( irrespective of ruling party / alliance) and only way out is going to courts , recently HC struck down the entry tax which was being levied illegally for last many years by state government.

anujmishra · 27th July 2009, 10:15

Quote:

Originally Posted by amitk26

Whatever you say is right but this is one more case of official cheating by greedy state government .

Karnataka state is lot greedy in matters of taxation as compared to other states of Indian Union ( irrespective of ruling party / alliance) and only way out is going to courts , recently HC struck down the entry tax which was being levied illegally for last many years by state government.

If they really want to levy heavy tax on vehicles then change your model like Andhra Pradesh where if person buy second car he has to pay more tax than first one.

Nowdays car is not luxury item (atleast below 10 lakh price) it is necessity. To everybody's surprise NCR has the lowest tax rate than anywhere in India. Does Bangalore have more vehicles than NCR?

marathp · 27th July 2009, 10:38

Quote:

Originally Posted by amitk26

Whatever you say is right but this is one more case of official cheating by greedy state government .

Karnataka state is lot greedy in matters of taxation as compared to other states of Indian Union ( irrespective of ruling party / alliance) and only way out is going to courts , recently HC struck down the entry tax which was being levied illegally for last many years by state government.

I spoke to RTO help desk and as per him, tax is on net invoice value. (Which obviously is amount after discounts). Now, I don't know who is playing here, is it RTO or Dealer himself?

ownerofazkaban · 28th July 2009, 10:55

Hi,

The Road tax is based on Invoice price of the car. I have seen in Ford's corporate offers brochure that if they give 20k off on invoice (ex-showroom price) the Road tax etc is proprotionately less too and am talking for b'lore only.

If dealer is charging rd tax based on non-discount price, then the discount is not on invoice price, i.e, the invoice is to full amount and the discount is off the MRP kind off.

It only means one thing the discount is not off invoice price. it will not show up on invoice.

HTH,

marathp · 28th July 2009, 11:20

Quote:

Originally Posted by ownerofazkaban

Hi,

The Road tax is based on Invoice price of the car. I have seen in Ford's corporate offers brochure that if they give 20k off on invoice (ex-showroom price) the Road tax etc is proprotionately less too and am talking for b'lore only.

If dealer is charging rd tax based on non-discount price, then the discount is not on invoice price, i.e, the invoice is to full amount and the discount is off the MRP kind off.

It only means one thing the discount is not off invoice price. it will not show up on invoice.

HTH,

As per dealer he will show the discount in invoice, guess he can't do without it. If he gives an invoice without discounts, he will have problems in accounting.

CarsPG · 28th July 2009, 11:43

In Pune the taxes are based on the net price after discount.

malgudi · 28th July 2009, 13:49

In bangalore also the Road tax is charged on the Price after discount. I remember when I bought my getz in 2006, the ex-showrrom price was 3,99,000. I got a discount of 20,000 which was reflect in the invoice. Subsequently I was charged the Road tax on the discounted value of 3,79,000.
However there is difference in the way Maruti gives a discount. You pay the entire value of the car and the road tax on the ex-showrrom price. Once the car is registered, Maruti send a discount cheque of X amount.

25th July 2009, 16:42	#1
marathp BHPian Join Date: Jan 2009 Location: Bangalore Posts: 138 Thanked: 35 Times	Bangalore Road Tax calculation for new vehicle Hi - I was discussing with a Maruti dealer on the OTR of the car. He is giving a discount on current ex-showroom value, but Road Tax is calculated on the original value before discount. As per him, they have provided the cost to RTO and hence irrespective of the vehicle cost to me, road tax is same. Is it justifiable? RTO website states that cost of the vehicle is the invoice value provided by the manufacturer or dealer, but the dealer says different. I will be loosing 6-7 K if I go by dealer version. Can you guys suggest on how to go about it? Even insurance premium is calculated by Maruti is based on the ex-showroom value, not on the discounted value. Anybody can shed more light on this? Banglore tax % is 14.5% approx.
	() Thanks

26th July 2009, 16:43	#2
marathp BHPian Join Date: Jan 2009 Location: Bangalore Posts: 138 Thanked: 35 Times	Wonder why there is no response to this post..? Any comments from prospective buyers?
	() Thanks

26th July 2009, 16:48	#3
StarVegabond Senior - BHPian Join Date: Sep 2008 Location: Bangalore Posts: 1,891 Thanked: 42 Times	My suggetion is to negotiate with the dealer
	() Thanks

26th July 2009, 17:22	#4
edassery BHPian Join Date: Jun 2009 Location: Bangalore Posts: 45 Thanked: 0 Times	The calculation, as I understand, is as follows: The ex-showroom price = manufacturer's price + 12.5% VAT Since the above price is fixed, the discount is usually given on the On Road price (which include registration charges, road tax etc). It's a little bit unfair, but I guess, no company will change the ex-showroom price or offer discounts on that. The road-tax is 12% (of the ex-showroom price) for vehicles below 10L in ex-showroom price and 17% for that above 10L. For example, an Altis J with 9.8L ex-price and Altis G with 10.98L as ex-price has a difference of more than 60K in road tax! It's really unfair. Most of the RTO taxing, cess etc in Bangalore are horrible especially when they don't do anything about the road!
	() Thanks

26th July 2009, 22:44	#6
HappyWheels Senior - BHPian Join Date: Dec 2007 Location: Bangalore Posts: 4,106 Thanked: 537 Times	The ex-factory price is decided by the manufacturer and will include the cost of transportation of the vehicle to the location of the dealer, hence the difference. And this cost is billed to the dealer by the manufacturer. So, not change to that. And you cannot negotiate on that, since that will give a loop hole for all to exploit.
	() Thanks

27th July 2009, 10:03	#9
amitk26 Senior - BHPian Join Date: Jul 2008 Location: Bangalore Posts: 2,089 Thanked: 715 Times	Whatever you say is right but this is one more case of official cheating by greedy state government . Karnataka state is lot greedy in matters of taxation as compared to other states of Indian Union ( irrespective of ruling party / alliance) and only way out is going to courts , recently HC struck down the entry tax which was being levied illegally for last many years by state government.
	() Thanks

28th July 2009, 10:55	#12
ownerofazkaban BHPian Join Date: Aug 2006 Location: BLR Posts: 456 Thanked: 80 Times View My Garage	on invoice price Hi, The Road tax is based on Invoice price of the car. I have seen in Ford's corporate offers brochure that if they give 20k off on invoice (ex-showroom price) the Road tax etc is proprotionately less too and am talking for b'lore only. If dealer is charging rd tax based on non-discount price, then the discount is not on invoice price, i.e, the invoice is to full amount and the discount is off the MRP kind off. It only means one thing the discount is not off invoice price. it will not show up on invoice. HTH,
	() Thanks

28th July 2009, 11:43	#14
CarsPG BHPian Join Date: Jan 2009 Location: Pune Posts: 352 Thanked: Once	In Pune the taxes are based on the net price after discount.
	() Thanks

28th July 2009, 13:49	#15
malgudi BHPian Join Date: Apr 2006 Location: Mumbai Posts: 355 Thanked: 183 Times View My Garage	In bangalore also the Road tax is charged on the Price after discount. I remember when I bought my getz in 2006, the ex-showrrom price was 3,99,000. I got a discount of 20,000 which was reflect in the invoice. Subsequently I was charged the Road tax on the discounted value of 3,79,000. However there is difference in the way Maruti gives a discount. You pay the entire value of the car and the road tax on the ex-showrrom price. Once the car is registered, Maruti send a discount cheque of X amount.
	() Thanks