Ed speak

Evo India - - CONTENTS - SIRISH CHANDRAN @SirishChan­dran [email protected]­ub­lish­ing.com

TAXES! MORE TAXES! I HOPE YOU’VE BOUGHT what you had your eye on be­cause it’s go­ing to get more ex­pen­sive now that the deal­ers have ex­hausted old stock and the ad­di­tional 5 per cent im­port duty on kits will kick in. Did you know that you’re pay­ing as much as 210 per cent in tax on a car like the one star­ring on our cover? By charg­ing twice as much as it would cost, say, in Dubai, is our govern­ment go­ing to rake in more in tax? The peo­ple who can af­ford Fer­raris can also af­ford homes in Dubai and they’ll just stop buy­ing su­per­cars in In­dia, in­stead get­ting them on a Car­net from Dubai or wher­ever. I’m no econ­o­mist but won’t re­duc­ing prices boost de­mand and lead to more tax col­lec­tion here at home? CBUs have be­come so ex­pen­sive it is ab­so­lutely mad. To­day `1.1 crore buys you an Audi RS5 Coupe; ten years ago the R8 su­per­car cost the same. The new Rolls-Royce Phan­tom starts – starts! – at 9.5 crore ru­pees! Plus you pay 20 per cent reg­is­tra­tion tax (some states cap it at `20 lakh, some don’t) and then 3 per cent for in­sur­ance. Ba­si­cally from land­ing at the port to be­ing reg­is­tered, the cost of a bi­gengined CBU goes up three and a half to four times!

You might say bik­ers have it bet­ter af­ter Trump took to Twit­ter re­sult­ing in an al­most im­me­di­ate cut in im­port duty on CBU bikes from 75 to 50 per cent. But if that was to help Har­ley-David­son, fact of the mat­ter is around 85 per cent of H-D’s In­dian vol­ume is CKD which, thanks to the afore­men­tioned hike in im­port duty, has got­ten more ex­pen­sive. Tri­umph’s In­dia head used his 280 char­ac­ters to high­light that im­port­ing bikes via the FTA route from Thai­land is now cheaper than as­sem­bling in In­dia!

Six years ago I went to work for Porsche, where the busi­ness case was writ­ten with cus­toms duty at 60 per cent. In the next bud­get it went up to 75 per cent, and a year later 100 per cent. All put to­gether the to­tal tax was 164 per cent, which meant the care­fully writ­ten busi­ness plan to­gether with dealer vi­a­bil­ity went out of the win­dow. Back then MNCs were talk­ing about In­dia be­com­ing the next China. To­day they laugh at the thought.

Ei­ther we are too blink­ered to see what­ever big pic­ture the bu­reau­crats have in mind or they are miss­ing the woods for the trees. The bot­tom line, you’ve al­ready paid the high­est tax rate on what­ever you’ve set aside for your car or bike. To then have to fork out even more be­cause an­other tax has gone up just makes the blood boil. ⌧

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