[longhorn]

Originally Posted by SunilM

Agree.

It makes little business sense to decrease prices when raw material prices are increasing all over. Since Suzuki is not in charity business, they will have to cut corners somewhere. Their interiors are already "not flattering" and most of these range cars go out with minimum luxury features. One can only hope they don’t have cheaper plastics then what they already have and that Suzuki, with this move, will not drag the entire car industry towards "al-chepo" products. That will be a sad outcome. One Nano is enough. Every car need not be minimalistic.
I know many will be celebrating, but we need to look at the long term picture and its effect on the Indian car industry. And then we complain when other car companies try to develop "made for India" (read cheap) cars!

Well the main problem behind this is the tax structure on cars. The government should amend the archiac tax laws. Around 40% of the cost of a car amounts to taxes. Take a small example. The Maruti 800 which has an ex showroom price of Rs 2 lakh would cost only 1.2 lakhs ex showroom if we were to pay no taxes at all ! They treat cars like luxury items though they very well know that it has become a necessity nowadays. They should bring down the tax rates. Only then manufacturers will be encourgaed to provide better products. After all, it all boils down to affordability.

I don't think Suzuki would be dumb enough to sell cars at a loss. Their profit margins though, would definitely take a hit but not to the extent of the discount thats coming in. With the huge volumes that they have, they can always get vendors to cut costs.

[Daewood]

Originally Posted by longhorn

Well the main problem behind this is the tax structure on cars. The government should amend the archiac tax laws. Around 40% of the cost of a car amounts to taxes. Take a small example. The Maruti 800 which has an ex showroom price of Rs 2 lakh would cost only 1.2 lakhs ex showroom if we were to pay no taxes at all ! They treat cars like luxury items though they very well know that it has become a necessity nowadays. They should bring down the tax rates.

Well. Cars are more of a luxury item today than they were in yesteryears, beacuse of the space crunch we have in our roads. No amount of road widening or flyovers(using the 40% tax money) can tide over this problem. Reducing taxes will benefit only the profit greedy car manufacturers. Our quality of life will not improve. It will only deteriorate and we will be spending more hours on the roads commuting than we spend with our family.

Look at this attached picture, and imagine what will happen if cars become so cheap and are driven by a majority of our 1.2 billion population to commute to office daily.

[longhorn]

Its for the government to provide proper infrastructure. You can't blame the car manufacturers for the plight of our roads. If only the taxes they collected actually went into building infrastructure. I think the general public would be very happy to use public transport if there was a proper system in place which is not the situation at the moment.

[Daewood]

Originally Posted by longhorn

Its for the government to provide proper infrastructure. You can't blame the car manufacturers for the plight of our roads. If only the taxes they collected actually went into building infrastructure. I think the general public would be very happy to use public transport if there was a proper system in place which is not the situation at the moment.

Yes, you can't blame the car manufacturers...but asking for a further cut in taxes is unacceptable. The automobile industry was provided a stimulus package by the government last year and manufacturers reduced prices.
Car sales picked up and now sales are at an all time high. Isn't asking for further tax benefits a criminal offence?

The reality is taxes are really low in India that reducing them further will make the Highways department and city corporations go bankrupt..and we will all be driving on mud roads filled with trenches and potholes.

Almost all modes of urban public transport in India are running huge losses,
because of the ticket charges. To compensate for the low ticket prices we have buses and trains which are run, crowded beyond any sane limit. If only buses and trains are less crowded and more frequent i don't think majority of the urban dwellers will have a problem in using public transport. The problem is if you raise ticket prices there will political parties on the streets demanding a price cut, but nobody takes out a procession against companies paying measly wages. Only when Indians (lower middle class) are paid respectable salaries you can make people to pay more taxes.

The reason for all those modern and robust infrastructure in developed countries is the high tax structure prevailing there.

[longhorn]

Originally Posted by Daewood

The reason for all those modern and robust infrastructure in developed countries is the high tax structure prevailing there.

Yes, but those countries pay you back by providing you with good infrastructure unlke here where they just want to loot your money. Our cars would require less than half of what we normally spend on them for routine maintenance if just the roads alone were upto international standards. And again, why should we have to keep re-registering our cars as we shift our residence from state to state. Why can't we have just one time registration that's valid all over India for the life of the car. It's a real pain for transferable employees. I feel someone should take the govt to court for this.

[Traxter]

Cars are as much an aspirational buy as they are utilitarian. People want to be seen owning good cars, which is why they pay insane prices for Ferrari/Porsche or even Fiat 500. They also generate a lot of jobs, both during production and later for maintenance. India has a good chance to be a automobile export powerhouse that cannot happenif we kill domestic car market.

Hence it is not good to tax them too high. If we tax both petrol and cars reasonably their prices will crash more than 50%..

However, road usage charges need to be high, especially in big cities for key choked roads. Along the lines of ERP in Singapore. That will let people keep cars but use them sparingly or pay. Such taxes, instead of going into the general bottomless pit called Govt. kitty, which will be plundered by parasitic unproductive staff, should be specifically be made available for subsidised public transport.

Then we can have best of both worlds

[harimakesh]

Originally Posted by Traxter

Cars are as much an aspirational buy as they are utilitarian. People want to be seen owning good cars, which is why they pay insane prices for Ferrari/Porsche or even Fiat 500. They also generate a lot of jobs, both during production and later for maintenance. India has a good chance to be a automobile export powerhouse that cannot happenif we kill domestic car market.

Hence it is not good to tax them too high. If we tax both petrol and cars reasonably their prices will crash more than 50%..

However, road usage charges need to be high, especially in big cities for key choked roads. Along the lines of ERP in Singapore. That will let people keep cars but use them sparingly or pay. Such taxes, instead of going into the general bottomless pit called Govt. kitty, which will be plundered by parasitic unproductive staff, should be specifically be made available for subsidised public transport.

Then we can have best of both worlds

Fully agree with your views. Why a Cab car doing 200K milege in 2 years and private car doing 20K in two years pay a fixed road tax? that too why road tax is based on cost of vehicle instead of how much the vehicle used the roads. Key road usage toll will decongest and justify road tax.

Communist russia influenced tax the rich help the poor is our tax system in force. Stricter impartial population control is a MUST in India for fair taxation to prevail on cars and other perceived luxury but now necessary items. Fair taxation can take us seriously OT!

Originally Posted by longhorn

Yes, but those countries pay you back by providing you with good infrastructure unlke here where they just want to loot your money. Our cars would require less than half of what we normally spend on them for routine maintenance if just the roads alone were upto international standards. And again, why should we have to keep re-registering our cars as we shift our residence from state to state. Why can't we have just one time registration that's valid all over India for the life of the car. It's a real pain for transferable employees. I feel someone should take the govt to court for this.

Now it is an Era for Indian public to find Car a necessity rather a luxury.

Good government is fundamental for infrastructure development especially to achieve good roads futurustic policy makers are need of the day.

Unfortunately we have a serious disparity among governance policy makers and Atuomobile industry driven economy.

We need several GQD quality roads and futuristic urban planning.

We educated all indians must Exercise democracy to vote & elect a government that can function to build our Nation. We can only demand governance infrastructure while paying taxes ONLY if we contribute in electing our govt. Now the govt is elected by illeterates on FREE rice, FREE dhothi etc... This must change

Sorry for being OT

[Daewood]

Originally Posted by longhorn

Yes, but those countries pay you back by providing you with good infrastructure unlke here where they just want to loot your money. Our cars would require less than half of what we normally spend on them for routine maintenance if just the roads alone were upto international standards. And again, why should we have to keep re-registering our cars as we shift our residence from state to state. Why can't we have just one time registration that's valid all over India for the life of the car. It's a real pain for transferable employees. I feel someone should take the govt to court for this.

According to an estimate by the planning commision India requires $900 billion to spruce up it's infrastructure to global standards. But where do we get this money? We can't go with a begging bowl to IMF or any other agency.

Roughly calculated if every Indian contributes Rs. 3500 for a period of 10 years this can be achieved. This is acheivable on paper as the per capita income of an Indian has increased to Rs.38000, but not every Indian earns a minimum of Rs.38000. There are people who don't even earn Rs.10000 per annum. But to compensate for these poor people the richer can be made to pay more ( like Rs.3800 for income above 1lakhs, and say Rs. 38,000 for income above 20 lakhs) But who has the data about who earns how much? maybe after the UID project of Mr.Nandan Nilekani is implemented all over India, all these dreamy therotical things of you and me will become true and we will be driving on good roads which will cause less maintenance for our cars.

Re-registering cars is a good thing, but only the process is wrong. It is really a pain to get your work done in a RTO without the help of middlemen. The process of re-registering your car when you shift to another state helps in reducing the number of vehicle thefts.

[longhorn]

Originally Posted by Daewood

Re-registering cars is a good thing, but only the process is wrong. It is really a pain to get your work done in a RTO without the help of middlemen. The process of re-registering your car when you shift to another state helps in reducing the number of vehicle thefts.

I don't think it's a good thing. As an Indian citizen I should be free to keep to keep my vehicle anywhere within the territorial boundaries of India for as long as I wish to without having to re-register each time I get transferred to some other state by nature of my job. When the insurance is valid all over the country, why not the registration? Why should be the citizen be penalised for the govt's inefficiency and inability to maintain a centralised database of all vehicles registered in India inspite of paying through your nose in taxes(sales tax, road tax, excise duty, service tax and what not)? Do you need a passport to stay in TamilNadu if you are a Keralite? Absolutely not. Why then does my car need to be re-registered?

[Asifgrkhan]

Originally Posted by longhorn

I don't think it's a good thing. As an Indian citizen I should be free to keep to keep my vehicle anywhere within the territorial boundaries of India for as long as I wish to without having to re-register each time I get transferred to some other state by nature of my job. When the insurance is valid all over the country, why not the registration? Why should be the citizen be penalised for the govt's inefficiency and inability to maintain a centralised database of all vehicles registered in India inspite of paying through your nose in taxes(sales tax, road tax, excise duty, service tax and what not)? Do you need a passport to stay in TamilNadu if you are a Keralite? Absolutely not. Why then does my car need to be re-registered?

+1.

I have had to pay life tax thrice for one of my cars. First in Bihar (which is the same as Delhi - so practically free. 5k buys you LTT and registration) and then in Karnataka and later in Andhra Pradesh.

Coastal Karnataka used to have the sorriest state of roads in all of India (and that includes Bihar) and the imbeciles have the gall to charge the highest road taxes in the country. Dont know about Bangalore but in Mangalore, during the months of Jan - March, it is a 24x7 activity.

Guess all the corrupt officals who thrive on bribes year round also have to make their quota sometime.

[Daewood]

Originally Posted by longhorn

Why should be the citizen be penalised for the govt's inefficiency and inability to maintain a centralised database of all vehicles registered in India

When a centralised system of vehicle data is implemented nobody will be able to steal a vehicle in bangalore and drive it in bhopal.
Actually it's not a herculean task, maybe itz not happening because of smooth co-ordination between the transport departments of each state.

I guess the whole idea of paying the same tax in different states is there to discourage the ploy of people who buy vehicles in places where taxes are less. Like in Chennai 15 years back lot of Pondicherry registered vehicles were plying. Later there was a crackdown on that practice.
My opinion is that when people are trasfered to another state the concerned employer should be made liable to pay for the employee's extra burden of taxes. Some of the IT companies follow this practice.

[longhorn]

Originally Posted by Daewood

My opinion is that when people are trasfered to another state the concerned employer should be made liable to pay for the employee's extra burden of taxes. Some of the IT companies follow this practice.

That's just passing the buck. Eventually someone has to pay- employee or employer. The point I am trying to make is why should someone have to pay at all when you have already paid life time tax to one state govt? They should either stop collecting LTT, or if they collect, the onus should be on them to do the pro rata transfer from one state to another. Why should I be running from pillar to post. You, the govt, has created this mess so you should clean it up, not me! You register the car in one state, you should be able to drive it around or keep it anywhere in India you wish to. The centre should strictly implement one country one rate policy for road tax instead of being left to the mercy of state govt's whims and fancies.

Edit : I think its high time we had a thread on this!

[Daewood]

Originally Posted by longhorn

That's just passing the buck. Eventually someone has to pay- employee or employer. The point I am trying to make is why should someone have to pay at all when you have already paid life time tax to one state govt? They should either stop collecting LTT, or if they collect, the onus should be on them to do the pro rata transfer from one state to another. Why should I be running from pillar to post. You, the govt, has created this mess so you should clean it up, not me! You register the car in one state, you should be able to drive it around or keep it anywhere in India you wish to. The centre should strictly implement one country one rate policy for road tax instead of being left to the mercy of state govt's whims and fancies.

Edit : I think its high time we had a thread on this!

When the employer is transfering an employee for his own business interests he should be made accountable for the extra charges the employee incurs. Itsn't that fair?

As per your suggestion of transfering taxes paid in one state to the other, say you have used the car in the first state for 3 years, doesn't that state have the right to charge you for those 3 years. Now how do you calculate what you're liable? that will lead to more complications and more redtapism.

As for uniform taxes and vehicle prices all over India, it is not a possibility.
The price of a vehicle made in Chennai and tranported all the way to Kolkatta cannot be the same as in Bangalore. There are also many other factors which are responsible for difference in prices. Even in USA taxes and prices vary from state to state.

[longhorn]

Originally Posted by Daewood

As per your suggestion of transfering taxes paid in one state to the other, say you have used the car in the first state for 3 years, doesn't that state have the right to charge you for those 3 years. Now how do you calculate what you're liable? that will lead to more complications and more redtapism.

I think I've mentioned on a pro rata basis in my earlier post. Take your share for 3 years and transfer the remaining amount ! Eventually it all goes to the govt kitty - centre or state or whatever.

Originally Posted by Daewood

As for uniform taxes and vehicle prices all over India, it is not a possibility.
The price of a vehicle made in Chennai and tranported all the way to Kolkatta cannot be the same as in Bangalore. There are also many other factors which are responsible for difference in prices. Even in USA taxes and prices vary from state to state.

I was referring to road tax, not the others. I believe we should have uniform road tax all over India. Currently it's left to the mercy of the state govt. 6% in Kerala, 9% in AP, God knows what's the basis for Karnataka, but they do leave you a lot poorer !

[Daewood]

Originally Posted by longhorn

I think I've mentioned on a pro rata basis in my earlier post. Take your share for 3 years and transfer the remaining amount ! Eventually it all goes to the govt kitty - centre or state or whatever.

I think the old system of Road tax being paid every year is the solution to your problem. But since all car buyers will not like going to the RTO every year to pay taxes, there should be an option of choosing either Life Tax or Yearly taxes.