Car road tax: Does it come under "price protection" or not

The dealer told me that while the ex-showroom price of my Mahindra XUV700 will have price protection, the road tax will be based on the vehicle's latest price.

A Team-BHP fan (he prefers to remain anonymous) drops the following query via our share page!

Hi GTO,

I am in the process of getting an XUV700 from PPS Bangalore. I received the final invoice and was told that, while the ex-showroom price will have the price protection, road tax will be on the latest price as RTO considers the current ex-showroom price when determining the road tax.

I tried verifying this online, but couldn't find any information on the same.

Assuming the dealer is correct, that means if Mahindra keeps increasing the price, then customers will pay a much higher road tax than what is the vehicle's actual ex-showroom cost.

Yet another unintended consequence of Mahindra announcing public price increases, while offering price protection on the back end.

Thought I should let you know.

Thanks and regards

Here's what BHPian nagr22 had to say about the matter:

Unfortunately, this is how it works in Karnataka. When I bought my car a couple of years back, the dealer gave close to a 4L discount on the ex-showroom price but I still had to pay the full road tax as per the 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.

Here's what BHPian DriveOnceMore had to say about the matter:

This is how govt. reaps us. Taxes are always calculated on the original price and NOT ON the discounted price. Even in supermarkets, when you buy a "Buy 1 Get 1" item, you pay taxes for both.

Here's what BHPian RaghuVis had to say about the matter:

I hope I am not crucified for this, but keeping aside the car scenario here and thinking from a Macro level, I think it is absolutely the right thing to do.

Let me ask the other way around, and this is a genuine question so hoping lawyers can chip in. Imagine two same car deliveries on the same day, from the same showroom, one booked on Day 1 with price protection and the second one booked a few days later with a higher price. Is it legal for a company to show different ex-showroom prices in the invoice to two customers on the same day?

Discounts/Price Increase/Price Decrease/Protection are all factors at the discretion of each individual company. Why should the government lose out on the money because some company wants to give some sort of differential treatment outside the purview of state/central rules and regulations?

I do hope this thread does not turn into a "government is looting us" thread!

Here's what BHPian Newtown had to say about the matter:

I write from what I learned during the registration of my Taigun.

The process created in the portal by the government is based on the showroom price. That price gets updated by the manufacturers themselves in the portal. My dealer was unable to get the payments done as the showroom price for my particular trim was not updated by the manufacturer.

Hence, it does seem clear that even if one were to have a different showroom price committed to them by way of price protection, the taxes will be calculated on the prevailing showroom price at the time.

Here's what BHPian lamborghini had to say about the matter:

Same in Maharashtra also - RTO will charge on ex-showroom price & they will give you a challan (receipt) for it.

That 10L discount on the A4 would be around 11.5L in MH if the actual transacted prices were taken into consideration but the RTO isn't bothered by the discounts on offer, or whether a buyer is using black money to cover a portion of the new car cost - they will charge on ex-showroom prices prevailing at the time.

The same receipt is shared with the buyer when they take delivery along with other vehicle documents.

If this is the case in the OP's home state, then the RTO Challan would show the amount & he should discuss in writing with the dealer that if RTO charges are lower on the challan than what is being charged (Taxes + Cess and all as applicable), then the same would be deducted by him during the time of the final payment.

Check out BHPian comments for more insights and information.