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Re: Budget 2016 & Indian Cars: All you need to know The Price Impact:



The 1% infrastructure cess won't make much of a difference to the petrol hatchback segment. Think of a price impact of Rs. 3,000 on an Alto (or less than the cost of two tanks of fuel). The Swift petrol? Between Rs. 5,000 - 6,500.



The higher cess on small diesels makes the price difference between petrol & diesel hatchbacks / compact sedans wider by 1.5%. The 2.5% infrastructure cess makes your Grand i10 diesel pricier by ~15,000 rupees, while the fully-loaded Elite i20 diesel is now more expensive by about ~20,000 rupees.



It's cars over 4 meters in length or engines bigger than 1.2L P / 1.5L D that will see a greater impact. The Etios petrol, Maruti Ertiga, VW Vento, Mahindra Thar and gang just saw their prices shoot up by 4%. On a Rs. 9 lakh Skoda Rapid, the tag is heavier by Rs. 36,000.



Any car over 10 lakhs is usually over 4 meters in length and / or has bigger engines. These cars will attract not only the 4% infrastructure cess, but even the 1% TCS (tax collected at source). Again, remember that the TCS will be credited back to you at the time of paying your income taxes. Still, the net 5% hike means that your outflow for a Honda City has increased by Rs. 50,000. The same for an XUV500 AWD AT is a lakh! Eyeing a C-Class? Be prepared to shell out about 1.5 - 2 lakhs more at the time of purchase. An E-Class? Between 2.5 - 3.0 lakhs. S-Class? You probably won't bother with such small details.



Logistical Challenges:



While I personally support the 1% 'luxury car TCS', I'm not entirely convinced if it's a good idea to deposit the advance tax with the dealer. It does raise a number of concerns. For one, dealers are known for their carelessness and you should be prepared to follow up frequently with their accounting departments (for your TCS certificate). Then, considering how many organisations default on paying TDS, service tax etc., what happens if the dealership delays / doesn't deposit the tax with the government? It's just a logistical nightmare. Imagine what will happen if a customer pays the TCS amount to a loss-making dealership, who in turn uses that to pay salaries / other expenses and then shuts down? It would have been preferred if the car buyer could himself pay the TCS online and produce the certificate before the car goes for registration. Online tax payments today have a simple procedure that anyone can follow!