Car Prices and Budget 2016

[Surfer]

Budget 2016: FM Arun Jaitley makes buying cars costlier for you - The Economic Times

1% additional tax will be charged on luxury cars above Rs 10 lakh

1% infra cess will be levied on small petrol cars. A 2.5% infra cess will be imposed on diesel cars.

The additional 2.5-3.5% cess will further pull down demand for diesel cars & SUVs.

 

[Nanofreak]

I presume once the budget is out, most of the mfr. of car launches in March will hone in their strategies, as to where to plug their new car prices.

Good times ahead.

 

[Nairrk]

The budget also says ''4% high capacity tax for SUVs.''

 

[Surfer]

The budget also says ''4% high capacity tax for SUVs.''

1) Petrol/LPG/CNG = length not exceeding 4m and engine capacity not exceeding 1200cc – 1%
2) Diesel = length not exceeding 4m and engine capacity not exceeding 1500cc – 2.5%
3) Other higher capacity motor vehicles and SUVs/bigger cars – 4% (this means all vehicles not under a) or b) above)

looks like SUV buyers has to pay 1,00,000+ now from current price.

 

[TSIVipul]

looks like SUV buyers has to pay 1,0000+ now from current price.

Sirji 10,000 is too small an estimate for the hike. Likes of Scorpio, Safari, XUV, Creta etc will have to pay up to 40-50k for their range topping variants while the likes of Fortuner, Endy, Pajero, Santa Fe etc will see a straight ahead hike of 70-100k for their variants.

 

[Yarlagadda]

For SUV it will be 4+1= 5% we need to pay extra.
TATA Safari VX we have to pay around 70000 extra....

 

[TSIVipul]

For SUV it will be 4+1= 5% we need to pay extra.
TATA Safari VX we have to pay around 70000 extra....

I guess this 4% + 1% is the duty levied on the manufacturer excluding the VAT. So this should be levied on say 10-10.5 lac for Storme VX 400 and at that cost; the additional tax wont be over 50-55k IMO. No add the VAT and 7k more increased... heck; that's a hike of at least 57k for the said car

 

[generalmax]

I saw it like this "Pollution cess of 1 per cent on small petrol, LPG and CNG cars; 2.5 per cent on diesel cars of certain specifications; 4 per cent on higher-end models."
This means it must be on the current tax(VAT).Not on the vehicle price. Cess is a tax on tax. Correct me if I am wrong.

 

[parveen]

At least they should not increase tax on CNG cars, in that why it will reduce difference between price of petrol & CNG variants & more people will prefer to go for CNG but

All SUV will now cost at least 30K more

Is thay also increase tax for hybrid cars like Ertiga & Ciaz ?

 

[adivik]

Will Maruti SHVS get exemption from infrastructure Cess, Hybrids are exempt " Explanation.- For the purpose of this entry, “hybrid motor vehicle” means a motor vehicle, which uses a combination of battery powered electric motor and an internal combustion engine to power the vehicle to drive trains, but does not include such micro-hybrid motor vehicle with start and stop technology, using battery powered electric motor only while in static condition " Is SHVS a Micro Hybrid?

 

[Automaticar]

I saw it like this "Pollution cess of 1 per cent on small petrol, LPG and CNG cars; 2.5 per cent on diesel cars of certain specifications; 4 per cent on higher-end models."
This means it must be on the current tax(VAT).Not on the vehicle price. Cess is a tax on tax. Correct me if I am wrong.

This tax is applicable on the ex-showroom price. Hence a top end XUV500 will cost more by almost 1Lacs now.

 

[aysrinivas]

I saw it like this "Pollution cess of 1 per cent on small petrol, LPG and CNG cars; 2.5 per cent on diesel cars of certain specifications; 4 per cent on higher-end models."
This means it must be on the current tax(VAT).Not on the vehicle price. Cess is a tax on tax. Correct me if I am wrong.

This tax is applicable on the ex-showroom price. Hence a top end XUV500 will cost more by almost 1Lacs now.

Like Generalmax said it is a cess and not a tax. So XUV should not cost 1 lakh more.

In my understanding it works this way ; If the cost of the Car is 100 Rs and out of which 20 Rs are taxes then 4% extra will be levied on 20 rs and not the 100 Rs. Unless XUV show room price is in neighborhood of 1 crore, I do not see it going up by 1 lakh.

PS: I am not an accountant and this is just my understanding of cess. other members please correct me if my assumptions are wrong.

 

[adivik]

The Infrastructure Cess will be like ED at the transaction Value ( basic) despatch from Company to the Dealer when despatched from the Factory.

It needs to be worked out, Basically Sale price of Car Manufacture + ED + Cess + Transport + VAT = Input cost to Dealer , who takes VAT credit Add his Margin adds his output VAT which is the Ex Showroom price. So I think it should be around 60-80%(Small car 12% ED, FAME 12.5% to SUV 30% ED) of Ex showroom price into the Cess rate will be the Increase. SO I expect a 0.9% to around 3.8% in Ex Showroom prices.

Assuming all Manufacturers have a depot in a state to avoid CST. It may be called a Cess but notification is clearly states it is on overall value and not on the ED alone.

 

[Vishwas]

The move is evident of the past history and the increase in purchasing power of the people.
No wonder vehicles are of main targets because of the traffic we face in day to day basis.

IMHO: Potential buyers of SUVs and Luxury cars, please don't break your heads for price hikes, because the one who wants it shouldn't be cribbing about the price hike. Should go and just buy or be satisfied with lesser models.

 

[TSIVipul]

IMHO: Potential buyers of SUVs and Luxury cars, please don't break your heads for price hikes, because the one who wants it shouldn't be cribbing about the price hike. Should go and just buy or be satisfied with lesser models.

Sirji this is the day banks are there for. Now anyone buying a BIG SUV will simply take a lac more as a loan (Loan buyers, cash buyers don't bother a lac or two when spending 25+ lac) and simply pay INR 2100 more per month; there goes the government policies of making the roads less crowded.