[Stolidus500]

Originally Posted by shancz

Ex-showroom price = Factory price + GST + Cess.
On road price = Ex-showroom price + RTO charges + Insurance + extras.

I know cess on new cars is applicable. But the member I replied to said something about cess on her car i.e. prefacelift 1.6 creta, something about betterment of business. That part was unclear to me. I haven't heard cess being applicable on used cars. I wanted clarification from her, about what she meant.

[SahilS]

Originally Posted by echo77

https://pib.gov.in/PressReleasePage.aspx?PRID=1884399



Looks like ALL four of the criteria need to be true:
1. it is popularly known as SUV
2. has engine capacity exceeding 1500 cc
3. length exceeding 4000 mm
4. ground clearance of 170 mm or above

Now, what happens to all SUVs where the Engine Capacity is just under 1500 cc. Will Cess be reduced from 22% to 17%?

For eg
Hyundai 1.5 Diesel is actually 1493 cc
Maruti 1.5 Petrol is actually 1462 cc

If all 4 needs to be true, then Tata Harrier, Tata Safari, XUV700 etc are also not SUVs anymore.
They all have laden Ground Clearance less than 170mm. So they should now be taxed at 43% instead of 50%, effectively an almost 1 lac exshowroom price reduction (7% of approx 14lac)

Here is a snippet from Tata Harrier's owners manual showing Laden Ground Clearance as 150mm

[shancz]

Originally Posted by Stolidus500

I wanted clarification from her, about what she meant.

Apologies for jumping the gun on this one, I misunderstood, my bad. Will let the intended person answer that.

[RunGaDa]

As someone quoted above so perfectly:
“How hard it is for us to follow international guidelines for the type of vehicle.”
For God’s sake UAE came from no where to become one of the best managed road systems in the world.
But we want to do everything “Indian” because there’s some block inside the heads of planners to comply to international standards.

Did we reach anywhere because of that? We are the accident capital country of the world, we pay with our life for unplanned poor driving conditions in a car which is heavily taxed without an error on our part.

We can find greedy contractors defining the lane width because they were told to construct a flyover with 3 lanes each side and they end up two lanes each side by cost cutting. No issues make three lane markings.
The low and middle level corruption is so rampant that common man gets just tossed around by some weight throwing slobs.

There isn’t *one* policy which is having any brains in it. All are catering to some foolish minded assumptions and making sure the public will be made Guinea pigs to finally decide the usefulness of it.

[Chhanda Das]

Originally Posted by TDIRaghav

I believe that Creta is more than 4000 mm so it will anyways be considered an SUV for GST purposes.

The point of contention about the Creta is not its length or ground clearance or its popularity as an "SUV". The thing is that the Creta is available with 6 different engines, two of which are more than 1500 cc while the remaining 4 are less than 1500 cc. The ridiculousness of this situation is that people will have to pay taxes at different rates for different variants of the same car.

Originally Posted by Stolidus500

Cess is also on used cars? I don't get your point here. I haven't heard about paying cess on your existing car.

If I know correctly then when we sell our car that was used for "furtherance of business" purposes or in other words advancing our business interests, then we have to pay this cess along with GST. The rate of this cess will vary upon whether we had originally claimed input tax credit while buying the car or not. However, if we sell our car that was used for personal uses only then we do not have to pay this cess. This is the situation if I remember correctly

Originally Posted by shyampsunder

Today only the top 10% of the population can even afford the most basic car. Trying to impose different tax slabs to milk the top 1% vs the top 10% is a pointless exercise with no winners.

The auto industry contributes to nearly 50% of India's manufacturing GDP and approximately more than 7% of its overall GDP. However, that was not the point of contention in my initial post on this thread. The issue was the sheer ridiculousness of the fact that one variant of a car is to be considered as an SUV while the exact same car with a slightly smaller engine will not be considered as an SUV. If there can be one rank one pension, one India one tax, one India one law, one India one ration card, one India one Gas Grid, one Nation one Subscription, etc then why can't there be one car one tax ? Is that too much to expect ? And it is not as if the different tax slabs for different types of cars is a hitherto unknown concept.

Originally Posted by shancz

The hue and cry isn't about the cars getting cheaper(very slightly) but the definition of what qualifies as an "SUV".
The current version doesn't make sense and honestly shows an attitude of indifference by the folks who drafted it.

Personally I expect it to be modified in a more sensible way before being executed.

You have reiterated my thoughts exactly and I couldn't have explained it better myself

[jono213]

Originally Posted by TSIched'Out

Currently cars with engine capacity exceeding 1500 cc, length exceeding 4000 mm and having ground clearance of 170 mm attract a GST of 28% and a 22% cess, taking the effective tax rate to 50%. However, states do not have a consistent definition define a vehicle as a SUV, leading to confusion among automakers.
Keep Revvving!

Honestly not surprised at this point, considering already in place laws on automobiles in India like the insane import tax and the sub 4m rule, which have severely limited the market in India.

Such arbitrary definitions for what is such a diverse group of automobiles seems absolutely ludicrous to me.

[autobahnjpr]

Tax slabs are on the characteristics of the car, not on the price. The price of a car is decided by each manufacturer. Sister cars from Maruti and Toyota are priced differently. This is what has to be understood. The idea is to promote smaller cars with lesser capacity engines by taxing them at a lower rate.

Any criteria chosen can be subjected to ridicule as being arbitrary and stupid. Introducing multiple slabs too can be treated same way and people can bang their head saying multiple slabs are some stupid idea and a single slab would be easy to understand and implement.

Originally Posted by Chhanda Das

Here is the moot point about the correlation of prices to taxes :-
It is ridiculous to tax a car priced at INR X at the same rate as a car priced at more than INR 3X. I cannot believe that it is so difficult to understand something so simple

[Chhanda Das]

Originally Posted by autobahnjpr

Tax slabs are on the characteristics of the car, not on the price.

Tax slabs should be based on different characteristics of the car but should not differentiate between different variants of the exact same car and that was my point in my initial post on this thread

[Stolidus500]

Originally Posted by Chhanda Das

If I know correctly then when we sell our car that was used for "furtherance of business" purposes or in other words advancing our business interests, then we have to pay this cess along with GST. The rate of this cess will vary upon whether we had originally claimed input tax credit while buying the car or not. However, if we sell our car that was used for personal uses only then we do not have to pay this cess. This is the situation if I remember correctly

Paying GST and cess on vehicle you claimed ITC for, is whole different scenario than you saying paying cess on your 1.6 Creta. Also as far as I understand, you only have to pay GST and cess back, if you generate less revenue than the ITC amount claimed. Very fringe case. Firstly, ITC on whole vehicle is applicable in very limited cases, then them selling the said vehicle earlier than usable life.
(Not a CA just my basic understanding and interpretation, could be wrong)
If you have a personal vehicle or in a company's name you don't have to pay any cess that was my point.

[Chhanda Das]

Originally Posted by Stolidus500

There is no 1.6 creta anymore on sale

Originally Posted by Stolidus500

Cess is also on used cars?

Originally Posted by Stolidus500

Very fringe case.
(Not a CA just my basic understanding and interpretation, could be wrong)
If you have a personal vehicle or in a company's name you don't have to pay any cess that was my point.

My points were as follows :-
1) There are definitely 1.6 Creta cars on sale
2) Yes, cess is applicable on used cars too in some specific cases
3) Cess has to be paid while selling used cars too irrespective of whether the car was a personal vehicle or a company vehicle provided that the vehicle was used for "furtherance of business".

Personally, I would be very happy to be proven wrong in both points 2) and 3) above since that will make vehicles cheaper and hence accessible to more people which all of us want, isn't it ?

[Stolidus500]

Originally Posted by Chhanda Das

My points were as follows :-
1) There are definitely 1.6 Creta cars on sale
2) Yes, cess is applicable on used cars too in some specific cases
3) Cess has to be paid while selling used cars too irrespective of whether the car was a personal vehicle or a company vehicle provided that the vehicle was used for "furtherance of business".

Personally, I would be very happy to be proven wrong in both points 2) and 3) above since that will make vehicles cheaper and hence accessible to more people which all of us want, isn't it ?

The cars on which your points 2 and 3 will be applicable are so less in numbers they have no bearing on the used car market. These miniscule number of vehicles can't make used cars expensive as you are trying to allude to, as simply market is full of cars on which cess is not applicable at all. The owners of such cars will bear losses if they sell the car before generating enough GST as they have claimed ITC for.
As for point 1, I meant new ones not used.

[Gummybear]

Why higher taxes for more ground clearance?

Citizens: Roads are bad!!
Govt: (do nothing)
Citizens: ( buy better GC vehicles)
Govt: Oh citizens found a loophole and enjoying better rides..hmmm..add tax on more GC.

[SedateGuy]

Originally Posted by Chhanda Das

The point of contention about the Creta is not its length or ground clearance or its popularity as an "SUV". The thing is that the Creta is available with 6 different engines, two of which are more than 1500 cc while the remaining 4 are less than 1500 cc. The ridiculousness of this situation is that people will have to pay taxes at different rates for different variants of the same car

Where is the problem in different slabs for the same car in a different variant. If one likes large engines so much be prepared to pay more for the privilege of owning it.

[Chhanda Das]

Originally Posted by SedateGuy

Where is the problem in different slabs for the same car in a different variant.

Then why not customize a different tax structure for each and every variant of each and every vehicle ? Why not collect taxes from each and every road user (pedestrians, bicycles, etc), owners of animals (cows, dogs, buffalos, elephants, camels, etc) ?

If we want international-level cars in India then we must abide by internationally accepted norms

[cs_rajesh]

IMHO, Taxation should be simplified. Well that is one of the prime purpose of GST too.

• GST should be based on the price of the car and should be thus simple to calculate and apply.
  Thus similar priced cars across different segment hatchback, sedan or SUV, may be taxed at same amount based on their base or ex-factory price.
  Thus different variants of same car would fall under same rate? The tax amount may be higher due to higher price of a variant, yes but not higher because some variant is classified under current criteria as SUV, for example.
  
• One can levy cess, if a car is classified to be SUV or a car is using ICE instead of Hybrid for sustainability reasons.
  Govt may give concession for EV, may levy no cess for hybrid and levy cess for a vehicle with ICE.
  Govt may also levy a surcharge or higher road tax for cars that are SUVs or MPVs, because perhaps they are larger or heavier than sedans or hatchbacks. (for example, Govt today charges higher tax for LCV for example).