Taxes or Day light Robbery?
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9.5 Lakh taxes on a 12.5 Lakh car. And this doesn't even include the exorbitant taxes you'll be paying on petrol. Considering you pay an Avg Rs 55/L tax on 1 L petrol, with avg vehicle mileage of 13 km/L, the taxes on petrol for running 1 Lakh km itself would be approx 4.3 Lakhs.
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Yeah, please go through the link and you will see the pain. This is not good for middle-class people. We will have to take a loan to pay taxes one day if this continues.
Direct
Indirect
GST
CESS
Road Tax
Other
Taxes Breakup in Buying a Car including GST+ Road Tax + Taxes as Part of Car Ownership. Breakup Composition in Hatch, Sedan, Luxury Cars as Ownership Costs
Car Ownership is a matter of Joy and Pride for the Car Owner. But - other than it - is also a matter of Joy for Government - as they make Huge Revenue not only at time of Purchase but at Ownership too
Earlier in Pre GST Scenario had multiple taxes
- Excise Duty
- VAT
- Infrastructure Cess
- CENVAT
- Entry Tax / Octroi / LBT
which are are all merged as part of GST - but as a Car Owner its Important to assess in how much Taxes do we pay on buying New Car in India
Below is GST Slab on Buying Internal Combustion Engine Car
| GST + Compensation Cess | Classification |
| 28% + 1% Cess | Sub 4 Meter Petrol Cars under 1.2 Litre engine |
| 28% + 3% Cess | Sub 4 Meter Diesel Cars with Engine < 1.5 Litre |
| 28% + 17% Cess | > 4 Meter Cars with Engine < 2 Litre |
| 28% + 20% Cess | Sedan and SUV Cars above 4 Meter Cars with Engine > 2 Litre and Laden GC< 170 mm |
| 28% + 22% Cess | SUV Cars above 4 Meter Cars with Laden Ground Clearance > 170 mm |
However, if you are buying EV Car - just 5% GST without any Compensation Cess is applicable
See how GST and Cess Calculated on Jeep Compass
This is a quote from Jeep Showroom as extracted when GST Regime was introduced. As can be seen in above quote
- 28% GST is charged equivalent to Rs 3.8 Lakh
- 17% Cess is Charged equivalent to Rs 2.3 Lakh
GST and Cess is Calculated on Base Price of Vehicle (Factory Price + Transit Insurance + Freight + Dealer Margin)
On Face of it, looks like exorbitant tax pf Rs 6.1 Lakh as GST Paid on a Car having Ex-showroom of Rs 19.69 Lakh
Then is Road Tax which is applied on buying Car and goes to State TRansport Department. Road Tax Varies from State to STate.
You can calculate RTO Charges and Road Tax - 
For a Car Like Compass Petrol its Rs 1.96 Lakh as Road Tax which is applied in Delhi. The same may be higher or slight lower in Other States
| Road Tax | 3% to 24% | Based on Vehicle Pricing - Differential in every State |
Its Important for a Vehicle Owner also to understand that Taxes are One Time only. Been
- GST is applied on Paying Car as a One Time Payment at time of Buying Car
- Differential Tax is applied. For Budget Cars are Lower Cess as against Higher Cess for Bigger Cars
- Road Tax is Valid for 15 Years (in almost all states except West Bengal having option of 5 Year and 15 Year)
Government uses these Taxes to
- Provide in Infrastructure Support
- Development of Roads, Connecting Highways
- Build Efficient Transport System and share it for benefit of Common Man
- Build India as a Nation to Provide Best in Class Connecting Roads to users
So, even if you pay in say Rs 8 Lakh as all inclusive Tax (Road Tax + GST + Cess) on Jeep Compass as Premium SUV which is what like Valid for 15 Years. it would only imply paying tax of Rs 66000 Annually on a Car and use in all Infrastructure, Roads, Transport System as build by Government
For a Small Car like Maruti Swift Vxi - this all inclusive Tax (Road Tax + GST + Cess) is Rs 2 Lakh which is what valid for 15 years. it would only imply paying tax of Rs 16000 Annually on a Car and use in all Infrastructure, Roads, Transport System as build by Government
So in a way you can be Proud of yourself to be Contributing to Infrastructure Development and Nation Building by buying a Car !!
Component |
Rate |
| Taxes on Petrol (Excise + VAT) | Almost Running to tune of Rs 50 per Litre on Petrol, Diesel |
| GST on Insurance Premium | 18% |
| GST on Labor Charges | 18% |
| GST on Spare Parts - Tyre, Battery, Spare Parts | 28% |
| GST on Loan Foreclosure | 18% |
Not discussing on taxes but my view on this topic is that buying a car should be prohibitively expensive, the traffic is just too much and we dont have enough parking spaces as well, govt should ban cars selling below 30 lacs.
Automobile stocks would crash but its important to maintain peace of mind in urban areas. The extra money they get should be invested on public transport.
People have money they are buying cars not only one but multiple. Resulting in excessive traffic.
All major cities should be covered with Metro to reduce traffic & pollution too. Metro is best possible public transport in Modern times.
Operational till midnight.
But stupid people will give free revdis will promote Free Bus travel for women who earn 50k monthly ?
And majdoor will pay 350 Taxi fare to reach station in time ?
Public transport s**ks in every major cities. No fixed schedule, prices, bad behaviour, day light L00t by auto & taxi without any restriction hand in hand with Traffic police?
First FIX corruption, tax will reduce automatically.
From chaprasi to babus everyone is corrupt! Why ? Because Democrazy allows it legally !!! Human Rights 🥲🥲 for In humans !
The point here is govt is not in favour of individuals buying more cars which results in the need for more infrastructure with less productivity
more infra in the form of roads -parking space etc and mind you it may seem govt earns handsomely but on a portfolio level govt looses more to build infra & a personal car is used barely for around 5% of its capability & thus resulting in loss of productivity
so govt is right here in charging more tax ....personal vehicle is not a right mode of transportation for high density population multiplied by lack of planned cities - land locked - high pollution & in a detoriarating environment
So its absolutely right to have such high taxes especeially true of Large suvs in particular
It can be adjusted by cutting the luxuries(Which also comes from our hard money) from Top govt professionals. But why only a salaried person should suffer?
That's nice thinking
Change the country
Then problem is still we don't ask the question to govt.
Yeh log ek aisi state se aate hai jo only apna fayda dekhti hai
These high taxes would be fine if the money actually went into developing infrastructure for the people. But our tax money goes into enriching politicians and their families for 20 generations while the infra crumbles in a couple of years. This is the biggest reason people are angry about taxes.
High profile Software Engineer (working in Singapore) can not afford to buy a car in Singapore.
They slap double tax to avoid the traffic. But the good thing is, MRT (Train) and Bus services are too good, you don't feel like having a car.
Car is necessity in India now a days. Any amount of Tax on car will not stop people from buying a car.
It missed the income tax part.. This 22 lakh rs. would be post tax deduction. So add 8-9 lakh of direct income tax also to get the cost of ownership..
think tax as a charity if you are not getting back anything.
you can even think tax as a fees to enjoyment after buying a car.
No Matter How High the Taxes or Prices are... Bikes and Cars are bought on EMI even in small villages. No govt. wants a solution. If they want a solution, the simplest way is to remove the corruption in the RTO Office. Everyone gets a license even after failing the test.
इस सरकार से यही उम्मीद की जा सकती है मिड डे में खाने मैं अंडा पीने के लिए पउआ भी शुरू कर दे तो कोई बड़ी बात नहीं है।
Everything can be done only for Vote Bank...
Keep paying your taxes on time, so that the government can introduce more freebies.
I don't know who decides this but surely they were born with a silver spoon otherwise any normal person can understand this thing.
Long story short : Taxes
Why would one need to spend Rs 12.5 lakh on an SUV? Why not buy a 4L- 5L hatchbak like Alto K10 or Kwid? Ultra rich people who own SUVs and luxurious imported cars don't care about such taxes.
For SUVs, imported cars, sedans, hatchbacks, & electric vehicles, the GST is different. Taxes are implemented to encourage electric or fuel efficient vehicles and deter SUVs manufacturers and luxury car importers to conserve oil & prevent pollution. Taxes are necessary to increase the cost of SUVs and luxury cars coz oil prices can't be increased due to it's correlation with inflation and various other factors.
Car kyu lete ho bicycle lo na. Jai ho
you missed to mention that you again will have to pay the toll to go on roads which are built with our tax money... and we are paying all these taxes with salary for which we already paid tax....
Not discussing on taxes but my view on this topic is that buying a car should be prohibitively expensive, the traffic is just too much and we dont have enough parking spaces as well, govt should ban cars selling below 30 lacs.
Automobile stocks would crash but its important to maintain peace of mind in urban areas. The extra money they get should be invested on public transport.
assume your wife is pregnant and she needs to visit the hospital and it’s raining,. would you wait for the bus?
Assume you worked all your life as a middle-class man and retired and wanna enjoy a peaceful travel, would you prefer using the bus and trains?
The point here is govt is not in favour of individuals buying more cars which results in the need for more infrastructure with less productivity
more infra in the form of roads -parking space etc and mind you it may seem govt earns handsomely but on a portfolio level govt looses more to build infra & a personal car is used barely for around 5% of its capability & thus resulting in loss of productivity
so govt is right here in charging more tax ....personal vehicle is not a right mode of transportation for high density population multiplied by lack of planned cities - land locked - high pollution & in a detoriarating environment
So its absolutely right to have such high taxes especeially true of Large suvs in particular