A Welcome Move
The government’s decision to reduce the Goods and Services Tax (GST) on motor cars is a welcome move, one conducive to lowering their prices. According to this, sub-four-meter cars with engines of less than 1,500 cc will attract an 18 per cent GST, while those above four metres and with an engine capacity of more than 1,500 cc will entail 40 per cent, as per the official notification from the GST Council as of now.
Under the present tax structure, small cars have to pay 28 per cent GST and luxury cars 50 per cent. Then there is the road tax, other taxes, and cess. If you do the maths, the government makes more than the manufacturing company that has to buy the raw material and actually make the car. Thus, the manufacturer makes about 20 per cent to 30 per cent, whereas the government makes more than the cost of the car, including profit, and it does not end there. The car company has to pay income-tax on the profit. As for the car-buyers, their expenses just begin after paying for the car, insurance, and road tax. They are required to pay toll every time they drive on those pothole-ridden roads.
If the above were not enough, now the government has started blending 20 per cent ethanol with petrol, which reduces the fuel efficiency of the car, not to speak of the damage that this blend causes to the engine’s internals. Ideally, there should be an option to buy regular fuel or ethanol-blended fuel in accordance with the car’s age, and the ethanol-mixed fuel should be cheaper than regular petrol. Many people drive cars that are more than 10 to 15 years old, and those cars are in perfect condition. These will get ruined with ethanol-mixed fuel. Moreover, making ethanol from sugarcane is not good for the environment, because growing sugarcane requires a lot of water.
EDITOR – ASPI BHATHENA
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