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. ⌧