[Piyush_DT]

Originally Posted by wildsdi5530

Back to topic, taxation is always based on the perceived value and not on what you pay for it. Even in real estate, guidance value is taxed which is often more than the market value.

That is a positive way to put it The insurance agent said the same thing. You have already paid the premium as per current ex-showroom price and hence you can buy another one with that money.

[CoolFire]

I too am facing the same issue in Kerala. Think it is the same everywhere in the new Vahan system. Once the ex showroom price gets updated in the system, all new registrations for whatever price is taxed as per the new ex showroom price.

I am about to register a 2021 manufactured Skoda Kushaq and the discounts I am getting is not applicable for the tax amount.

[Hayek]

Also true in Maharashtra. When I bought my X3, I got it for an ex show room price of ₹43.5 l but road tax was levied on the headline price of ₹58 l. A manufacturer can protect you against what they get, not against the government’s tax take.

Wonder what Mahindra will do if the government increases GST on SUVs.

[SR-71]

This is the case with Karnataka. At the top end, we are charged 18% road tax and a 11% cess on the ex-showroom cost as advertised by the manufacturer on the date of registration. This works out to ~20% of the entire car cost insurance not being accounted for. However there are couple of things that do not make sense to me.

• First, nowhere will you find clarity on this, at least I haven't been successful on finding one. This RTO document simply states that the road tax is charged on the cost of the vehicle (page 11) leaving the wordings to be interpreted as per one's whim.
• Second the ex-showroom cost is the factory cost + GST. And the tax being on ex-showroom cost, basically means a portion of it is tax on tax. Again since there is no clarity everyone simply pays what is asked for

Ironically we have one of the worst road infrastructure which is simply working by god's grace and luck. So I am not sure why such a huge tax is being collected for in the first place

[niranjan.mulye]

I had booked my AX7L Diesel Manual on first day itself so had the price protection.So the ex-showroom was coming around 19,99,000.The dealer initialy quoted me tax on this price..But when the car went for registration they actualy calculated tax on increased ex showroom price(20,29,000) so higher tax bracket because price went above 20 Lakhs.
The dealer had no idea till the car actualy went for registration.They said that the increased prices are updated on the VAHAAN website so tax is calculatrd on that price.And as the process is online now no backhand practices allowed.
So the price protection is only for the ex showrrom price.

[xway]

This is not just karnataka or a particular state, its everywhere.

Unfortunately, government is not leaving any scope for business or others to give discount or margins and keep the entire money themselves.

Same is the case in real estate also.

I purchased a flat for 34 lacs but the stamp duty was paid on 45 lacs as that is what the government considers as the fair value of the flat. This is in Noida.

In Gurgaon and Delhi it is opposite as the value of the property will be half or lesser, but in reality the market rates are double and balance is taken in Cash.

In fact there was one case where the product was being given free, but the government wanted to charge 18% gst on a notional value.

[urbanzameendar]

Originally Posted by RaghuVis

Is it legal for a company to show different ex-showroom prices in the invoice to two customers on same day?

Picture this: You book a room at my resort for 31st of December in the month of October. I offered you an early bird discount of say 25%. But someone who books the same category of room on 29th of December will pay the full price due to no discount or higher than the printed tariff because we apply a peak date surcharge.

Now considering our tariff @ ₹7000+12% GST, you shall pay me ₹5880/- but the guy who booked at the last moment will pay ₹7840 for the same room, on the same date with the exact same amenities.

The invoices shall be generated on the same date but with different amount.

There is no compulsion that the invoice amount should remain same if generated on the same date.

[MadinMumbai]

Originally Posted by nagr22

Unfortunately this is how it works in Karnataka. When I brought my car couple or years back, dealer gave close to 4L discount on ex showroom price but I still had to pay the full road tax as per non-discounted price. I enquired about this a lot and finally the rationale given was that this is a move by the KA government to prevent under invoicing to save tax. So I left it at that.

This is a classic case of government at odds with it’s citizens. This kind of thing might have been okay when we were under the colonial yoke but now as free citizens, and with concepts like ‘ease of doing business’ and ‘make in India’ being bandied about, these policies are nothing but government’s high-handedness. Why should the government assume that its citizens are all out to rob it? This is presumptuous and offensive. A tax is applicable on the value of the transaction. The government has no business to decide what the transaction value is going to be. That decision rests with the buyer and seller. While the government, in the interest of price regulation, has set MRP on various goods there is no provision for Minimum Retail Price in law. These idiotic and colonial Mai-baap attitudes can and must be challenged in court. Many Governments in India still haven’t figured that we are no longer ‘ruled’ by them. They are supposed to serve us and not the other way around.

[wildsdi5530]

Originally Posted by urbanzameendar

There is no compulsion that the invoice amount should remain same if generated on the same date.

Can a similar thing be done with cars? On the day of booking, a virtual VIN is created, Road Tax and provisional registration is done immediately at the rates on that day.

After 1-2 years when the product is finally available, virtual VIN is mapped to the original VIN and original registration is done.

I'm sure the govt. will love this because it wants money as early as possible.

[RaghuVis]

Originally Posted by urbanzameendar

Picture this: You book a room at my resort for 31st of December in the month of October.

Is that a proper comparison? One is a product and another a service. GST might be same in some categories but the fundamental concept of taxation is different for both right?

[Kapany]

Originally Posted by RaghuVis

Is it legal for a company to show different ex-showroom prices in the invoice to two customers on same day?!

Happens everyday for airline ticket prices, apartments, automobiles and so many other categories.

[Vijin]

Back in January 2020, I had a slightly different experience with Telangana RTO. However, I was told that Telangana RTO used its own software for vehicle registration rather than Vaahan at the time. So I booked in December 2019 and received a Rs. 40k end-of-year + corporate discount. Got my car in Jan. 2020. My road tax receipt clearly displayed the reduced price, and my tax was reduced by nearly Rs. 4000. I was wondering how they could be so flexible, especially since they didn't have this discount in November or January.

[jagzrk]

I had faced this exact same scenario when taking delivery of my XUV300. My invoicing was done on 30th June but there was a price increase 5 days later and when taking delivery on 7th July, I had to shell out extra road tax of 3 to 4K, don't remember the exact amount. I didn't protest but just mentioned that it didn't seem fair.

However, the showroom adjusted this amount in accessories refund so basically I just got it refunded later. Probably the amount was comparatively smaller so was given as goodwill discount? There is no way to avoid paying the full road tax on current ex-showroom as the registration portal will simply not allow it. Whether the manufacturer / showroom absorbs this cost or the customer would be the only scenario.

[quantobigboot]

This happens in Haryana too. Recently brought home the XUV700. We got the first day price protection from Mahindra but at the time of delivery, road tax was calculated on the new ex showroom price, which was ~50k higher than the first day price.

[m8002?]

Originally Posted by MadinMumbai

This is a classic case of government at odds with it’s citizens. This kind of thing might have been okay when we were under the colonial yoke but now as free citizens, and with concepts like ‘ease of doing business’ and ‘make in India’ being bandied about, these policies are nothing but government’s high-handedness. Why should the government assume that its citizens are all out to rob it? This is presumptuous and offensive. A tax is applicable on the value of the transaction. The government has no business to decide what the transaction value is going to be. That decision rests with the buyer and seller. While the government, in the interest of price regulation, has set MRP on various goods there is no provision for Minimum Retail Price in law. These idiotic and colonial Mai-baap attitudes can and must be challenged in court. Many Governments in India still haven’t figured that we are no longer ‘ruled’ by them. They are supposed to serve us and not the other way around.

There are lots of issues with this.
Lets say the car ex-showroom is 21L. Now the dealer can invoice the car at 9L(quoting 12 lacs discounts ) and tax at a much lower rate. He can collect the remaining 12 lacs in cash from the buyer. Now stretch it a bit more and the dealer invoices the car at Rs. 1 with 21L discount. The govt. loses all the tax income. This is why the govt. insists on taxing at ex-showroom or the guidance value ( for property ). In fact, this was the norm earlier in real estate where the guidance value was less than 50% of the market price. Now, atleast in KA, TN the guidance values are almost at par with market rates. The disadvantage is that these values are not updated when the prices fall and you pay a higher tax.

Currently, there is no easy way to differentiate a genuine discount( orfall in prices) from under invoicing. I am not a bit fan of the current tax structure but in this case, I would side with the govt.