[wingsoffires]

In today's Hindustan Times here is a report that's going to discourage a lot of people about to buy a diesel car in Delhi. For some time now I have been confused between weather to go for a honda city or volkswagon vento diesel. This will probably sum it up for me. Apologies if the attachments have come in landscaping mode as doing this from my new galaxy s2.

[Poitive]

@wingsoffires : Thanks for the info, mate. This is bad news for me, as I too am looking out for a diesel sedan.

Could you please rotate the picture and then upload it again for ease of reading? I have already read it and it was tedious - it may help the others.

PS: Since you are considering the Vento, you should also TD the Optra Magnum Diesel- a car which many 'forget' to TD. Form an opinion about it after you TD it. You may be pleasantly surprised. [ ample discussion on this at the this thread ].

[swiftnfurious]

Thats a huge tax slab for people buying a car above 10L. An easy addition for 1.2L+ for the guys who have opted for such cars. Now looking at this, it may make more sense for those people to go for petrol rather than diesel cars. And the people who are in "queue", this sure is a bummer. For people who got their cars registered this week, what a LUCK! But on the other side, isn't Delhi fuel prices the cheapest in India?

[vina]

This is hardly 1-2% more than the current taxes - too little too late if the aim is to discourage diesel vehicles on the road.

[swiftnfurious]

Originally Posted by vina

This is hardly 1-2% more than the current taxes - too little too late if the aim is to discourage diesel vehicles on the road.

1-2%? I guess there is additional taxes from 5% to 12.5% over existing taxes. Isn't it a strong difference to make a change?

Edit:: Guess you were looking at the ex.showroom prices, please read the article on the right most end, which talks about revised "registration taxes".

Pasting the images back properly.

[vina]

Originally Posted by swiftnfurious

1-2%? I guess there is additional taxes from 5% to 12.5% over existing taxes. Isn't it a strong difference to make a change?

Edit:: Guess you were looking at the ex.showroom prices, please read the article on the right most end, which talks about revised "registration taxes".

Pasting the images back properly.

Attachment 574653

Attachment 574654

I was looking at the prices in the table without realising that those are ex-showroom. But then why are the ex-showroom prices changing if the govt. is increasing the registration tax?


Also, only vehicles above Rs. 10L will see major pinch (about 6.5%), for vehicles cheaper than 5L, the old tax was 4% new is 5%, while 5L-10L the difference will be roughly 3%

Given that most diesel cars sold fall in less than 10L range, this rise will have very little effect. And above 10L range most cars are anyway low-mileage (SUVs seem to be the target - but there again the effect will be minimal) so again most will prefer a diesel (or petrol+CNG in Delhi that is a viable option)


This will have some effect, but I don't think too much.

[Captain Slow]

Originally Posted by vina

This is hardly 1-2% more than the current taxes - too little too late if the aim is to discourage diesel vehicles on the road.

Exactly!! A person spending 10-12 lakhs on a car wont really care about an extra 5,000 - 10,000 Rs. govt must raise taxes on diesel cars by 150-200%

[RS_DEL]

This is the first tentative step. I may well be very very wrong, but my hunch is this has the tacit blessing of the union government.

As time goes on and this problem ( diesel subsidy getting diverted to private vehicle use) does not get resolved, look for tax hikes at every stage of the process i.e. from production of the vehicle to registration in the buyer's name.

[vina]

Originally Posted by RS_DEL

This is the first tentative step. I may well be very very wrong, but my hunch is this has the tacit blessing of the union government.

As time goes on and this problem ( diesel subsidy getting diverted to private vehicle use) does not get resolved, look for tax hikes at every stage of the process i.e. from production of the vehicle to registration in the buyer's name.

Don't get me wrong - it is a very good step. Govt. must increase taxes on diesel vehicles to control the subsidy burden - after all as tax payers we end up paying it one way or the other.

In addition some years down the line my diesel Figo will have a higher resale value

[RS_DEL]

@Vina: Congratulations on the anticipated windfall!

While the tax increase as of date does not look substantial, it will get bloated if taxes are raised prior to registration - that is one. Two the minions in every state finance ministry and the north block are now going to view this as a cash cow and bloody well make a virtue out of necessity and dump higher taxes on diesels. Virtue? Higher taxes on polluting cars used by rich who are ab-using the subsidy meant for the farmer! Jai jawan jai Kisan !!!!

[souravc]

Even if the tax difference goes up to Rs 30,000 ( just for the sake of arguement) , with a per litre price difference of Rs 20-25 between petrol and diesel this is hardly going to matter. It will push back the breakeven point by a max 6 months and not more and thats' the worst that it can get unless the govt can by some magic figure out a way of charging more from diesel LMVs as compared to LCVs.
The reality is summed up by the fact that the union govt increased diesel prices and then requested state govts to reduce sales tax - should be an eye opener for those who are hopeful of a parity between diesel and petrol anytime soon ! I guess with USD 90 per barrel being talked about as the new floor for crude prices ( as compared to the earlier USD 30-35), the pricing of petrol is left naked to even more rapid rise than ever as its decontrolled .

[RS_DEL]

Originally Posted by souravc

Even if the tax difference goes up to Rs 30,000 ( just for the sake of arguement) , with a per litre price naked to even more rapid rise than ever as its decontrolled .

Reality #1 - We are in an age of tightening interest rates courtesy inflation. As inflation abates, as it will, state governments will hike sales tax on fuel. Remember the babus love to raise taxes. It is all for the greater good!

Reality #2 - You mention a floor for crude prices which is reflective of tight supply conditions. By implication prices of all crude products will harden even further. Petrol more than diesel. Diesel price WILL also go up. Following from that, subsidy on diesel WILL also go up.

As we had discussed this earlier on a thread on fuel prices, differential prices of fuel based on end use is not an option. The differential taxation on vehicles is the way it will go. What we are seeing is merely a prologue, a curtain raiser if you will.

[souravc]

Originally Posted by RS_DEL

Reality #1 - --

Reality #2 - --
As we had discussed this earlier on a thread on fuel prices, differential prices of fuel based on end use is not an option. The differential taxation on vehicles is the way it will go. What we are seeing is merely a prologue, a curtain raiser if you will.

Reality # 3 - Diesel pricing is a political tool

Can't wait for the denouement - though being in the know of things I don't expect the script to change much, if at all .

[Ricky_63]

Originally Posted by Captain Slow

Exactly!! A person spending 10-12 lakhs on a car wont really care about an extra 5,000 - 10,000 Rs. govt must raise taxes on diesel cars by 150-200%

Are you aversed to diesels ?