Indian Economy News & Discussion - Nov 27 2017

The Technology & Economic Forum is a venue to discuss issues pertaining to Technological and Economic developments in India. We request members to kindly stay within the mandate of this forum and keep their exchanges of views, on a civilised level, however vehemently any disagreement may be felt. All feedback regarding forum usage may be sent to the moderators using the Feedback Form or by clicking the Report Post Icon in any objectionable post for proper action. Please note that the views expressed by the Members and Moderators on these discussion boards are that of the individuals only and do not reflect the official policy or view of the Bharat-Rakshak.com Website. Copyright Violation is strictly prohibited and may result in revocation of your posting rights - please read the FAQ for full details. Users must also abide by the Forum Guidelines at all times.
Ambar
BRFite
Posts: 1503
Joined: 12 Jun 2010 09:56
Location: Weak meek unkil Sam!

Re: Indian Economy News & Discussion - Nov 27 2017

Postby Ambar » 15 Sep 2020 18:34

Toyota halts India expansion plans.
https://www.carandbike.com/news/toyota- ... me-2295512

Toyota Motor Corp. won't expand further in India due to the country's high tax regime, a blow for Prime Minister Narendra Modi, who's trying to lure global companies to offset the deep economic malaise brought on by the coronavirus pandemic. The government keeps taxes on cars and motorbikes so high that companies find it hard to build scale, said Shekar Viswanathan, vice chairman of Toyota's local unit, Toyota Kirloskar Motor. The high levies also put owning a car out of reach of many consumers, meaning factories are idled and jobs aren't created, he said.

"The message we are getting, after we have come here and invested money, is that we don't want you," Viswanathan said in an interview. In the absence of any reforms, "we won't exit India, but we won't scale up."

Toyota, one of the world's biggest carmakers, began operating in India in 1997. Its local unit is owned 89% by the Japanese company and has a small market share -- just 2.6% in August versus almost 5% a year earlier, Federation of Automobile Dealers Associations data show.

In India, motor vehicles including cars, two-wheelers and sports utility vehicles (although not electric vehicles), attract taxes as high as 28%. On top of that there can be additional levies, ranging from 1% to as much as 22%, based on a car's type, length or engine size. The tax on a four-meter long SUV with an engine capacity of more than 1500 cc works out to be as high as 50%.


One would think the govt will do everything possible to support the automobile manufacturers since this is one industry where India has done reasonably well over the last 25 yrs. Ford and General Motors have either merged their operations with rivals or quit, Fiat has already quit,Nissan/Datsun is thinking of quitting, VW is unsure of its future in India and now Toyota is holding back. If we are to attract manufacturing from China, Vietnam etc. we really need to get out of the Nehru-Indira socialist tax and bureaucratic policies.

Raveen
BRFite
Posts: 806
Joined: 18 Jun 2008 00:51
Location: 1/2 way between the gutter and the stars
Contact:

Re: Indian Economy News & Discussion - Nov 27 2017

Postby Raveen » 15 Sep 2020 20:23

Ambar wrote:Toyota halts India expansion plans.
https://www.carandbike.com/news/toyota- ... me-2295512

Toyota Motor Corp. won't expand further in India due to the country's high tax regime, a blow for Prime Minister Narendra Modi, who's trying to lure global companies to offset the deep economic malaise brought on by the coronavirus pandemic. The government keeps taxes on cars and motorbikes so high that companies find it hard to build scale, said Shekar Viswanathan, vice chairman of Toyota's local unit, Toyota Kirloskar Motor. The high levies also put owning a car out of reach of many consumers, meaning factories are idled and jobs aren't created, he said.

"The message we are getting, after we have come here and invested money, is that we don't want you," Viswanathan said in an interview. In the absence of any reforms, "we won't exit India, but we won't scale up."

Toyota, one of the world's biggest carmakers, began operating in India in 1997. Its local unit is owned 89% by the Japanese company and has a small market share -- just 2.6% in August versus almost 5% a year earlier, Federation of Automobile Dealers Associations data show.

In India, motor vehicles including cars, two-wheelers and sports utility vehicles (although not electric vehicles), attract taxes as high as 28%. On top of that there can be additional levies, ranging from 1% to as much as 22%, based on a car's type, length or engine size. The tax on a four-meter long SUV with an engine capacity of more than 1500 cc works out to be as high as 50%.


One would think the govt will do everything possible to support the automobile manufacturers since this is one industry where India has done reasonably well over the last 25 yrs. Ford and General Motors have either merged their operations with rivals or quit, Fiat has already quit,Nissan/Datsun is thinking of quitting, VW is unsure of its future in India and now Toyota is holding back. If we are to attract manufacturing from China, Vietnam etc. we really need to get out of the Nehru-Indira socialist tax and bureaucratic policies.


And debunked - Toyota India vice chairman, Mr. Kirloskar himself tweeted that they are in fact investing 2000 Cr in India

Krita
BRFite
Posts: 202
Joined: 23 Jul 2009 13:33

Re: Indian Economy News & Discussion - Nov 27 2017

Postby Krita » 15 Sep 2020 20:42

Raveen wrote:
Ambar wrote:Toyota halts India expansion plans.
https://www.carandbike.com/news/toyota- ... me-2295512





And debunked - Toyota India vice chairman, Mr. Kirloskar himself tweeted that they are in fact investing 2000 Cr in India

The investment to rebadge Suzuki cars? With 44 percent tax on sub 4m SUVs like Ecosport and Brezza ( taxation decided by engine cc, dimension and ground clearance).
In Japan even kei cars have features like AWD, AEB, ESC and ventilated seats There is no hope for India, we want to protect environment and get rich at the same time.
The regulatory flipflops, steep taxation , insurance and now the reen tribunal and supreme court is slowly killing auto industry.

Vamsee
BRFite
Posts: 640
Joined: 16 Mar 2001 12:31

Re: Indian Economy News & Discussion - Nov 27 2017

Postby Vamsee » 15 Sep 2020 21:53

Foreign trade details for the month of Aug 2020 are out Link

Apr-Aug 2020
==========

Merchandise Exports : $97.66 B (Down 26.65 % YOY)
Merchandise Imports: $118.38 B (Down 43.73 % YOY)
----------------------------------------
Merchandise Deficit: $20.72 B
----------------------------------------

Services Exports : $84.47 B (Down 8.8 % YOY)
Services Imports: $49.56 B (Down 18.07 % YOY)
----------------------------------------
Services Surplus : $34.91 B
----------------------------------------

Total Exports : $182.13 B (Down 19.32 % YOY)
Total Imports: $167.94 B (Down 38.00 % YOY)
----------------------------------------
Total Surplus : $14.2 B
----------------------------------------

--Vamsee

V_Raman
BRFite
Posts: 741
Joined: 04 Sep 2008 22:25

Re: Indian Economy News & Discussion - Nov 27 2017

Postby V_Raman » 15 Sep 2020 23:20

All of this over taxation on business is a result of low payroll tax collection. We have to somehow increase payroll tax and sales tax collection as they form the bulk of taxes is developed countries.

Raveen
BRFite
Posts: 806
Joined: 18 Jun 2008 00:51
Location: 1/2 way between the gutter and the stars
Contact:

Re: Indian Economy News & Discussion - Nov 27 2017

Postby Raveen » 16 Sep 2020 00:25

Krita wrote:
Raveen wrote:
And debunked - Toyota India vice chairman, Mr. Kirloskar himself tweeted that they are in fact investing 2000 Cr in India

The investment to rebadge Suzuki cars? With 44 percent tax on sub 4m SUVs like Ecosport and Brezza ( taxation decided by engine cc, dimension and ground clearance).
In Japan even kei cars have features like AWD, AEB, ESC and ventilated seats There is no hope for India, we want to protect environment and get rich at the same time.
The regulatory flipflops, steep taxation , insurance and now the reen tribunal and supreme court is slowly killing auto industry.


Actually he specifically cited hybrid vehicle and EVs but since I agree with you 100% that Suzuki cars are worthless junk tin can death traps that couldn't cut it anywhere else so peddle their wares in India I'll let your hyperbole slide :D

Raveen
BRFite
Posts: 806
Joined: 18 Jun 2008 00:51
Location: 1/2 way between the gutter and the stars
Contact:

Re: Indian Economy News & Discussion - Nov 27 2017

Postby Raveen » 16 Sep 2020 00:27

V_Raman wrote:All of this over taxation on business is a result of low payroll tax collection. We have to somehow increase payroll tax and sales tax collection as they form the bulk of taxes is developed countries.



Yup back to the corner mom and pop store lying on tax returns, if they file them

kvraghav
BRFite
Posts: 921
Joined: 17 Apr 2008 11:47
Location: Some where near the equator

Re: Indian Economy News & Discussion - Nov 27 2017

Postby kvraghav » 16 Sep 2020 00:31

Regarding auto industry, I do not agree that govt is at fault here. The auto companies should question their vendors. How come auto companies are in loss but the vendors are making profit? Dosent that mean you are paying more to your supplier than what your customer is willing to pay you? Blatant corruption at the vendor management level. There is no open tenders or competitive bidding. Everybody's cousin gets the contract and then we want govt to help.

darshan
BRF Oldie
Posts: 2715
Joined: 28 Jan 2008 04:16

Re: Indian Economy News & Discussion - Nov 27 2017

Postby darshan » 16 Sep 2020 02:22

Gujarat govt approves letter of intent for world’s first CNG terminal in Bhavnagar
https://www.deshgujarat.com/2020/09/15/ ... bhavnagar/
Gandhinagar: The Government of Gujarat has approved a letter of intent for setting up world’s first CNG terminal port at Bhavnagar. Consortium of Foresight Group, Padmanabh Mafatlal Group and Netherlands based Boskalis will develop this brownfield port. Detailed Project Report (DPR) and environmental clearance will take 18 months time now onward as letter of intent is approved. After approvals are granted, on-site construction will begin, which will take another three-year time.

According to a note released by the State government, in-principal approval to this project was given Gujarat Infrastructure Development Board (GIDB) meeting in November last year.

Proposed CNG terminal will witness initial phase of investment of Rs. 1300 crore for setting up a 15 lakh tonne capacity CNG terminal. Also planned are 45-lakh tonne capacity liquid cargo terminal, container and white cargo terminal and ro-ro terminal. The entire project will come up at estimated cost of Rs. 1900 crore.
...

V_Raman
BRFite
Posts: 741
Joined: 04 Sep 2008 22:25

Re: Indian Economy News & Discussion - Nov 27 2017

Postby V_Raman » 16 Sep 2020 02:30

Raveen wrote:
V_Raman wrote:All of this over taxation on business is a result of low payroll tax collection. We have to somehow increase payroll tax and sales tax collection as they form the bulk of taxes is developed countries.



Yup back to the corner mom and pop store lying on tax returns, if they file them


as usual - moral corruption at the individual level is our biggest enemy :|

Mort Walker
BRF Oldie
Posts: 8691
Joined: 31 May 2004 11:31
Location: The rings around Uranus.

Re: Indian Economy News & Discussion - Nov 27 2017

Postby Mort Walker » 16 Sep 2020 09:44

kvraghav wrote:Regarding auto industry, I do not agree that govt is at fault here. The auto companies should question their vendors. How come auto companies are in loss but the vendors are making profit? Dosent that mean you are paying more to your supplier than what your customer is willing to pay you? Blatant corruption at the vendor management level. There is no open tenders or competitive bidding. Everybody's cousin gets the contract and then we want govt to help.


Which vendors are making a profit? The autopart industry is suffering AFAIK. Production is down. This industry accounts for $56.52 billion in sales in 2019 and back then employed over 1.5 million people in skilled jobs. GoI's auto taxation and fuel BS-VI policies have been haphazard to the auto industry which back in 2016-2018 was expanding to supply markets overseas. Now it is a hurt industry.

https://www.livemint.com/news/india/aut ... 33929.html

nandakumar
BRFite
Posts: 1207
Joined: 10 May 2010 13:37

Re: Indian Economy News & Discussion - Nov 27 2017

Postby nandakumar » 16 Sep 2020 11:19

darshan wrote:Gujarat govt approves letter of intent for world’s first CNG terminal in Bhavnagar
https://www.deshgujarat.com/2020/09/15/ ... bhavnagar/
Gandhinagar: The Government of Gujarat has approved a letter of intent for setting up world’s first CNG terminal port at Bhavnagar. Consortium of Foresight Group, Padmanabh Mafatlal Group and Netherlands based Boskalis will develop this brownfield port. Detailed Project Report (DPR) and environmental clearance will take 18 months time now onward as letter of intent is approved. After approvals are granted, on-site construction will begin, which will take another three-year time.

According to a note released by the State government, in-principal approval to this project was given Gujarat Infrastructure Development Board (GIDB) meeting in November last year.

Proposed CNG terminal will witness initial phase of investment of Rs. 1300 crore for setting up a 15 lakh tonne capacity CNG terminal. Also planned are 45-lakh tonne capacity liquid cargo terminal, container and white cargo terminal and ro-ro terminal. The entire project will come up at estimated cost of Rs. 1900 crore.
...

What is the economic for transporting natural gas without liquefication? It seems to me that unless the gas can be transported by overland gas pipeline transportation cost over sea without liquefaction would make it unviable.

Krita
BRFite
Posts: 202
Joined: 23 Jul 2009 13:33

Re: Indian Economy News & Discussion - Nov 27 2017

Postby Krita » 16 Sep 2020 12:41

Raveen wrote:
Krita wrote:The investment to rebadge Suzuki cars? With 44 percent tax on sub 4m SUVs like Ecosport and Brezza ( taxation decided by engine cc, dimension and ground clearance).
In Japan even kei cars have features like AWD, AEB, ESC and ventilated seats There is no hope for India, we want to protect environment and get rich at the same time.
The regulatory flipflops, steep taxation , insurance and now the reen tribunal and supreme court is slowly killing auto industry.


Actually he specifically cited hybrid vehicle and EVs but since I agree with you 100% that Suzuki cars are worthless junk tin can death traps that couldn't cut it anywhere else so peddle their wares in India I'll let your hyperbole slide :D

Dhanyavaad,jaan baksh diya. Your ire would have send me to depression. :rotfl: :rotfl:
Internet superheroes.

kvraghav
BRFite
Posts: 921
Joined: 17 Apr 2008 11:47
Location: Some where near the equator

Re: Indian Economy News & Discussion - Nov 27 2017

Postby kvraghav » 16 Sep 2020 19:26

Mort Walker wrote:
kvraghav wrote:Regarding auto industry, I do not agree that govt is at fault here. The auto companies should question their vendors. How come auto companies are in loss but the vendors are making profit? Dosent that mean you are paying more to your supplier than what your customer is willing to pay you? Blatant corruption at the vendor management level. There is no open tenders or competitive bidding. Everybody's cousin gets the contract and then we want govt to help.


Which vendors are making a profit? The autopart industry is suffering AFAIK. Production is down. This industry accounts for $56.52 billion in sales in 2019 and back then employed over 1.5 million people in skilled jobs. GoI's auto taxation and fuel BS-VI policies have been haphazard to the auto industry which back in 2016-2018 was expanding to supply markets overseas. Now it is a hurt industry.

https://www.livemint.com/news/india/aut ... 33929.html


It is not so much about the revenues but more in tune with the profit margin. I know a tools supplier who has a margin on 20-25% but has to share with the company executives. The car manufacturers are not making much on a car and that is because the profit margins get fatter as it goes down the supply chain. Even if the revenue falls, they still make 20-25% on that revenue.

Mort Walker
BRF Oldie
Posts: 8691
Joined: 31 May 2004 11:31
Location: The rings around Uranus.

Re: Indian Economy News & Discussion - Nov 27 2017

Postby Mort Walker » 16 Sep 2020 20:10

Govt. policy has hurt the auto industry and particularly the auto parts industry even before the pandemic. The auto parts industry was developing skilled labor within India and establishing a manufacturing chain. India has extensive parts suppliers for Hyundai and Suzuki along with at one time ramping up production for companies like Nippon Denso worldwide. India was becoming like Mexico for North America regarding auto parts.

Raveen
BRFite
Posts: 806
Joined: 18 Jun 2008 00:51
Location: 1/2 way between the gutter and the stars
Contact:

Re: Indian Economy News & Discussion - Nov 27 2017

Postby Raveen » 17 Sep 2020 04:14

Krita wrote:
Raveen wrote:
Actually he specifically cited hybrid vehicle and EVs but since I agree with you 100% that Suzuki cars are worthless junk tin can death traps that couldn't cut it anywhere else so peddle their wares in India I'll let your hyperbole slide :D

Dhanyavaad,jaan baksh diya. Your ire would have send me to depression. :rotfl: :rotfl:
Internet superheroes.


Maybe you can rent a sense of humor - that'll help you realize the last part was tongue in cheek. Internet slowpokes.

P. S. It would be "sent" not "send" - refer to comment about internet slowpokes

vimal
BRFite
Posts: 591
Joined: 27 Jul 2017 10:32

Re: Indian Economy News & Discussion - Nov 27 2017

Postby vimal » 17 Sep 2020 09:50

Mort Walker wrote:Govt. policy has hurt the auto industry and particularly the auto parts industry even before the pandemic. The auto parts industry was developing skilled labor within India and establishing a manufacturing chain. India has extensive parts suppliers for Hyundai and Suzuki along with at one time ramping up production for companies like Nippon Denso worldwide. India was becoming like Mexico for North America regarding auto parts.


Do you have examples of some specific policy decisions that caused this?

nandakumar
BRFite
Posts: 1207
Joined: 10 May 2010 13:37

Re: Indian Economy News & Discussion - Nov 27 2017

Postby nandakumar » 17 Sep 2020 11:04

vimal wrote:
Mort Walker wrote:Govt. policy has hurt the auto industry and particularly the auto parts industry even before the pandemic. The auto parts industry was developing skilled labor within India and establishing a manufacturing chain. India has extensive parts suppliers for Hyundai and Suzuki along with at one time ramping up production for companies like Nippon Denso worldwide. India was becoming like Mexico for North America regarding auto parts.


Do you have examples of some specific policy decisions that caused this?

Well, the GST rates on cars is 28%. For cars above engine capacity of 1500 there is a GST compensation cess of 22%. Toyota cars, especially their best sellers, are in the latter category.

V_Raman
BRFite
Posts: 741
Joined: 04 Sep 2008 22:25

Re: Indian Economy News & Discussion - Nov 27 2017

Postby V_Raman » 17 Sep 2020 11:16

wow these taxes are so unbelievably high!! is this because of GST and the prices have actually gone down to compensate for the tax rates?

can the govt say that if you are a registered tax payer - you pay reasonable x% and if you are not you pay these astronomical rates and it applies to new/used? will that encourage tax compliance at the individual level or will that get gamed?

hanumadu
BRF Oldie
Posts: 4768
Joined: 11 Nov 2002 12:31

Re: Indian Economy News & Discussion - Nov 27 2017

Postby hanumadu » 17 Sep 2020 13:38

V_Raman wrote:wow these taxes are so unbelievably high!! is this because of GST and the prices have actually gone down to compensate for the tax rates?


I believe taxes on cars have always been high, from even before GST regime.

Larry Walker
BRFite
Posts: 310
Joined: 26 Nov 2019 17:33

Re: Indian Economy News & Discussion - Nov 27 2017

Postby Larry Walker » 17 Sep 2020 13:46

India is a haven for 'tax-chor' and a killing ground for honest tax paying citizens - and we still expect that we will become super power and middle class will love this country. Example - I pay 30% TDS on the salary that I get - then when I go to buy a car with that tax-paid money I will pay further 30% tax - so in a simplistic way of looking at it - as a salaried person if buy a car I end up paying 60% tax in the money that I will spend to buy car !!! But a 'farmer' on the other hand will not pay any IT and will get waiver on auto taxes. Even hardcore communist countries can't best this utopia of communism called India.

V_Raman
BRFite
Posts: 741
Joined: 04 Sep 2008 22:25

Re: Indian Economy News & Discussion - Nov 27 2017

Postby V_Raman » 17 Sep 2020 14:58

Income tax is at least arguably acceptable - you are in top 1% of the country yada, yada - other taxes are daylight robbery on top of that!!

Will a differential other taxes system - like one rate for tax paying citizens vs others - if given proof work and incentivize people to become tax payers and increase income tax base?

chetak
BRF Oldie
Posts: 23081
Joined: 16 May 2008 12:00

Re: Indian Economy News & Discussion - Nov 27 2017

Postby chetak » 17 Sep 2020 15:02

Ambar wrote:Toyota halts India expansion plans.
https://www.carandbike.com/news/toyota- ... me-2295512

Toyota Motor Corp. won't expand further in India due to the country's high tax regime, a blow for Prime Minister Narendra Modi, who's trying to lure global companies to offset the deep economic malaise brought on by the coronavirus pandemic. The government keeps taxes on cars and motorbikes so high that companies find it hard to build scale, said Shekar Viswanathan, vice chairman of Toyota's local unit, Toyota Kirloskar Motor. The high levies also put owning a car out of reach of many consumers, meaning factories are idled and jobs aren't created, he said.

"The message we are getting, after we have come here and invested money, is that we don't want you," Viswanathan said in an interview. In the absence of any reforms, "we won't exit India, but we won't scale up."

Toyota, one of the world's biggest carmakers, began operating in India in 1997. Its local unit is owned 89% by the Japanese company and has a small market share -- just 2.6% in August versus almost 5% a year earlier, Federation of Automobile Dealers Associations data show.

In India, motor vehicles including cars, two-wheelers and sports utility vehicles (although not electric vehicles), attract taxes as high as 28%. On top of that there can be additional levies, ranging from 1% to as much as 22%, based on a car's type, length or engine size. The tax on a four-meter long SUV with an engine capacity of more than 1500 cc works out to be as high as 50%.


One would think the govt will do everything possible to support the automobile manufacturers since this is one industry where India has done reasonably well over the last 25 yrs. Ford and General Motors have either merged their operations with rivals or quit, Fiat has already quit,Nissan/Datsun is thinking of quitting, VW is unsure of its future in India and now Toyota is holding back. If we are to attract manufacturing from China, Vietnam etc. we really need to get out of the Nehru-Indira socialist tax and bureaucratic policies.


this shekar viswanathan guy, the vice chairman of toyota's local unit, toyota kirloskar motors is a gasbag. He blames India for his failures and is venting for some obscure reason.

toyota pays less tax in India than it pays in japan. Further more, for new investments, the tax rate is now down to 18%

the fact that he has failed to make any meaningful inroads into the Indian market is not something he seems willing to talk about.

GST affects every auto company depending on the engine capacity or size of the vehicle.

he should take a relook at the market today and focus on the niche segment(s) that he is most comfortable with and can service efficiently and profitably.

if at all, it is the customer who is saying "we don't want you" and not the govt and so he may like to take a good look at his product offerings and cut the cloth to suit the customer instead of trying to adapt and force fit the customer to an inferior product.
Last edited by chetak on 17 Sep 2020 15:24, edited 1 time in total.

chola
BRF Oldie
Posts: 4855
Joined: 16 Dec 2002 12:31
Location: USA

Re: Indian Economy News & Discussion - Nov 27 2017

Postby chola » 17 Sep 2020 15:22

Larry Walker wrote:India is a haven for 'tax-chor' and a killing ground for honest tax paying citizens - and we still expect that we will become super power and middle class will love this country. Example - I pay 30% TDS on the salary that I get - then when I go to buy a car with that tax-paid money I will pay further 30% tax - so in a simplistic way of looking at it - as a salaried person if buy a car I end up paying 60% tax in the money that I will spend to buy car !!! But a 'farmer' on the other hand will not pay any IT and will get waiver on auto taxes. Even hardcore communist countries can't best this utopia of communism called India.


The legacy of Kangress and the Nehru clan. We beat the commie chinese good by not succumbing to the capitalist marketplace!

Now commie Vietnam is taking the lion's share of the capitalist roading factories escaping the Peepul's Leepublic. Why would we want those?

We were soundly beaten by two commie nations in the free market able to escape the evil clutches of the global supply chains!

kvraghav
BRFite
Posts: 921
Joined: 17 Apr 2008 11:47
Location: Some where near the equator

Re: Indian Economy News & Discussion - Nov 27 2017

Postby kvraghav » 17 Sep 2020 15:27

^^^ Fortuner on road is 45 lakh rupees top end. Even if 50% is tax and insurance, it is still 23 lakhs from the company. Toyota have long been fleecing indians with the Quality key word. Their overall USP is best quality and best resale. The way they achieve high resale is by increasing the price of the car every year by nearly 10% even when the inflation indexes are much lower. The products have reached a limit in pricing since they have started knocking on the doors of luxury cars in terms of price. That is why the company is looking at the govt to reduce the taxes so that they can again keep increasing the prices.

Raveen
BRFite
Posts: 806
Joined: 18 Jun 2008 00:51
Location: 1/2 way between the gutter and the stars
Contact:

Re: Indian Economy News & Discussion - Nov 27 2017

Postby Raveen » 17 Sep 2020 19:36

The final tweet by Kirloskar was that Toyota is investing 2000 Cr in hybrid and battery tech in Indian in the next 12 months.

nachiket
Forum Moderator
Posts: 7926
Joined: 02 Dec 2008 10:49

Re: Indian Economy News & Discussion - Nov 27 2017

Postby nachiket » 17 Sep 2020 20:56

hanumadu wrote:
V_Raman wrote:wow these taxes are so unbelievably high!! is this because of GST and the prices have actually gone down to compensate for the tax rates?


I believe taxes on cars have always been high, from even before GST regime.

The astronomically high taxes on cars date from our socialist period where cars were considered a luxury. They are still a luxury....thanks to the high taxes. GST merely consolidated all the taxes and duties into one. It did not lower the effective overall tax rate.

The situation that has changed since the bad old days is that our predominant industry in the manufacturing sector is cars and auto-components. Our brilliant tax policies shrink the market for our own manufacturers and then we wonder why manufacturing doesn't pick up. Cars as well as fuel are used as cash cows by both the state and central governments for filling their coffers using taxes. I don't see this changing, especially now when the economy is down and the tax receipts have plummeted.

Krita
BRFite
Posts: 202
Joined: 23 Jul 2009 13:33

Re: Indian Economy News & Discussion - Nov 27 2017

Postby Krita » 17 Sep 2020 21:07

Raveen wrote:
Krita wrote:Dhanyavaad,jaan baksh diya. Your ire would have send me to depression. :rotfl: :rotfl:
Internet superheroes.


Maybe you can rent a sense of humor - that'll help you realize the last part was tongue in cheek. Internet slowpokes.

P. S. It would be "sent" not "send" - refer to comment about internet slowpokes

sivab
BRFite
Posts: 996
Joined: 22 Feb 2006 07:56

Re: Indian Economy News & Discussion - Nov 27 2017

Postby sivab » 17 Sep 2020 21:22

nachiket wrote: GST merely consolidated all the taxes and duties into one. It did not lower the effective overall tax rate.


Before GST, effective tax rate was higher. Manufacturers and suppliers were taxed at every stage from raw material to finished product. With GST, input tax credit reduced overall effective rate. But most manufacturers instead of passing on benefit to customers, just increased their profits. Then bad times hit them, karma. So it is not all government fault, they have to get revenue somewhere. Problem everywhere not just in India, is nobody wants to pay taxes, be it GST/sales/income etc including me. Everyone has a different level of acceptance of what they are willing to pay in taxes. Vast majority of Indians live in less than Rs. 10k a month. They pay GST too. Compared to them middle class is well off, able to buy cars and houses. But it is their right to complain about taxes on cars. It is always tax someone else, not me. If you ask what is acceptable effective tax rate, everyone will have a different answer. But then the same person will turn around and demand India should spend x% of GDP on defence. If you ask where will revenue come from, answer will be to cut subsidies/spending to others/poor. This is an eternal problem in every country I have lived in.

sivab
BRFite
Posts: 996
Joined: 22 Feb 2006 07:56

Re: Indian Economy News & Discussion - Nov 27 2017

Postby sivab » 17 Sep 2020 21:34

^^^ Some data on above
Segment Tax rate pre-GST Tax rate post-GST
Small cars 28% 18%
Mid-size cars 39% 18%
Luxury cars 42% 28%
SUVs 45% 28%

https://www.bankbazaar.com/car-loan/how ... india.html

nandakumar
BRFite
Posts: 1207
Joined: 10 May 2010 13:37

Re: Indian Economy News & Discussion - Nov 27 2017

Postby nandakumar » 17 Sep 2020 21:54

sivab wrote:^^^ Some data on above
Segment Tax rate pre-GST Tax rate post-GST
Small cars 28% 18%
Mid-size cars 39% 18%
Luxury cars 42% 28%
SUVs 45% 28%

https://www.bankbazaar.com/car-loan/how ... india.html

You need to take into account the GST compensation cess rate which wasn't there earlier.

bharathp
BRFite -Trainee
Posts: 61
Joined: 24 Jul 2017 03:44

Re: Indian Economy News & Discussion - Nov 27 2017

Postby bharathp » 17 Sep 2020 21:56

nachiket wrote:
hanumadu wrote:
I believe taxes on cars have always been high, from even before GST regime.

The astronomically high taxes on cars date from our socialist period where cars were considered a luxury. They are still a luxury....thanks to the high taxes. GST merely consolidated all the taxes and duties into one. It did not lower the effective overall tax rate.

The situation that has changed since the bad old days is that our predominant industry in the manufacturing sector is cars and auto-components. Our brilliant tax policies shrink the market for our own manufacturers and then we wonder why manufacturing doesn't pick up. Cars as well as fuel are used as cash cows by both the state and central governments for filling their coffers using taxes. I don't see this changing, especially now when the economy is down and the tax receipts have plummeted.

I would like to differ here and offer an explanation.

Having more taxes on cars with bigger engines means less cars on roads (fiip side of more chaper cars on roads). this may be good for short term manufacturing economy but creates a lot of fuel import burden. the govt has to balance both.

for Indian context, it will be great if govt can offer subsidies to electrical vehicles instead of gasoline/deisel vehicles. even if the short term loss is incurred, it reduces fuel import bill and eventually pays for the subsidy.

nachiket
Forum Moderator
Posts: 7926
Joined: 02 Dec 2008 10:49

Re: Indian Economy News & Discussion - Nov 27 2017

Postby nachiket » 17 Sep 2020 21:57

sivab wrote:^^^ Some data on above
Segment Tax rate pre-GST Tax rate post-GST
Small cars 28% 18%
Mid-size cars 39% 18%
Luxury cars 42% 28%
SUVs 45% 28%

https://www.bankbazaar.com/car-loan/how ... india.html

The same link has this right below the table you posted:

GST rate based on fuel type

Image

Sub 4-metre cars
Petrol engines less than 1.2l: This is the most popular car segment in India with cars such as Maruti Suzuki Dzire, Hyundai Grand i10, Toyota Etios Liva, Volkswagen Polo among others, that have been levied with a GST rate equal to 29%, a 2.5% reduction from the earlier tax regime.
Diesel engines more than 1.5l: Other cars commonly found on roads such as Hyundai i20, Ford Ecosport, Maruti Suzuki Vitara Brezza, Mahindra TUV 300, etc., that belong to this category of vehicles attract a GST equal to 31% in comparison to 33.25% in the earlier system.
Petrol engines more than 1.2l and diesel engines less than 1.5l: Subcompact sedans and subcompact SUVs with petrol engines larger than 1.2l and diesel engines smaller than 1.5l now attract taxes equal to 43%, a 1.7% reduction from the previous tax regime.
Larger than 4-metre SUVs: SUVs with petrol or diesel engines, irrespective of the displacement, such as Tata Hexa, Mercedes-Benz GLC, Mahindra Scorpio, Ford Endeavour, and so on, attract a tax equal to 43% compared to 55% from the previous regime.
Larger than 4-metre non-SUVs: Hatchbacks and sedans with petrol engines larger than 1.2l and diesel engines larger than 1.5l, like Honda City and Maruti Suzuki Ciaz, attract a tax equal to 43%, a reduction from 51.6% from the previous tax regime.
Electric cars: Individuals who buy electric cars, like Mahindra eVerito and Mahindra e20, were required to pay a tax equal to 20.5% earlier but are required to pay only 12% in the current GST tax system.

nachiket
Forum Moderator
Posts: 7926
Joined: 02 Dec 2008 10:49

Re: Indian Economy News & Discussion - Nov 27 2017

Postby nachiket » 17 Sep 2020 21:59

So total tax on the cars is calculated using segment plus engine displacement differentiates using fuel type and in most cases is in excess of 40%. As for tax revenues, lowering tax rates will not automatically mean killing revenues. Especially in situations like the current one where we are dealing with a loss of demand (which was the case even before covid). Increase in demand will rejuvenate a vital sector of the economy which can improve the job situation as well.

srin
BRF Oldie
Posts: 2013
Joined: 11 Aug 2016 06:13

Re: Indian Economy News & Discussion - Nov 27 2017

Postby srin » 17 Sep 2020 23:07

High taxes are applicable for other players in the market too.

See this team bhp link for the sales numbers. They have less than 2.5% of marketshare. Other than Innova, they don't have any car that is the top in its category. They have wrong product-mix for the market, pure and simple.

Now, I don't know if the taxes have increased post-GST or not. However, I'm curious to understand if people here are proposing to decrease tax on car, which other tax are you proposing to increase correspondingly to make up for the short-fall ? Or do we need to stop investing in new roads and highways ?


SridharMatlaparthi
BRFite -Trainee
Posts: 9
Joined: 04 Nov 2018 23:52

Re: Indian Economy News & Discussion - Nov 27 2017

Postby SridharMatlaparthi » 18 Sep 2020 02:02

Larry Walker wrote:India is a haven for 'tax-chor' and a killing ground for honest tax paying citizens - and we still expect that we will become super power and middle class will love this country. Example - I pay 30% TDS on the salary that I get - then when I go to buy a car with that tax-paid money I will pay further 30% tax - so in a simplistic way of looking at it - as a salaried person if buy a car I end up paying 60% tax in the money that I will spend to buy car !!! But a 'farmer' on the other hand will not pay any IT and will get waiver on auto taxes. Even hardcore communist countries can't best this utopia of communism called India.


Larry - Please spare the Indian farmer. A vast majority of them are more interested in where the next meal comes, rather than dream about paying taxes and indulge in luxuries. Personal experience - we had a decent amount of land in non-irrigated region of AP, still the amount my parents earned after a year's worth of toil was as much as a modest pay I earned at the start of my career.
A lot many of them have much lower holdings and consequently lesser earnings.
Looking at the wrong side of the country to blame. Please dont.

Rahul M
Forum Moderator
Posts: 17024
Joined: 17 Aug 2005 21:09
Location: Skies over BRFATA
Contact:

Re: Indian Economy News & Discussion - Nov 27 2017

Postby Rahul M » 18 Sep 2020 02:13

such a farmer would automatically come in the no-tax bracket after filing return, so what's the problem ?

I am sure you are aware that people whitewash huge amounts of illegal, often criminally gotten income by showing it as farming income, since that is non-taxable. this hits at the root of corruption.

bharathp
BRFite -Trainee
Posts: 61
Joined: 24 Jul 2017 03:44

Re: Indian Economy News & Discussion - Nov 27 2017

Postby bharathp » 18 Sep 2020 02:34

Rahul M wrote:such a farmer would automatically come in the no-tax bracket after filing return, so what's the problem ?

I am sure you are aware that people whitewash huge amounts of illegal, often criminally gotten income by showing it as farming income, since that is non-taxable. this hits at the root of corruption.


I want to add: rabert vadra was a "small farmer" when he got the land from the Hooda govt which he then sold the land to DLF. this circumvention is possible because of the loop holes.
another such loophole was that in India diesel was cheaper than Petrol for a long time - the argument was that diesel was used by truck drivers who are genrally poor and need subsidy.
this led to a boom in big luxurious diesel cars - because diesel is cheap!

vera_k
BRF Oldie
Posts: 3126
Joined: 20 Nov 2006 13:45

Re: Indian Economy News & Discussion - Nov 27 2017

Postby vera_k » 18 Sep 2020 10:00

Important observation about how things are playing out in terms of shifting economic activity from services to goods. The US economy is 80% services, while India is 60% services. If a shift from services to goods is under way, C-19 will provide a helpful tail wind to the effort to get more manufacturing established in India.

Let's Go Behind the Scenes of How Some Big Institutions Work

First, the idea that we may not be as much as a services economy any more is dazzling. Can we really be a manufacturing nation now


Return to “Technology & Economic Forum”

Who is online

Users browsing this forum: suryag and 99 guests