Friday, May 5, 2000,
Chandigarh, India


M A I N   N E W S

Haryana, HP yet to decide on ST hike
Tribune News Service

CHANDIGARH, May 4 — The Haryana, Rajasthan, Himachal Pradesh and the Delhi Governments have not taken any decision as yet on hiking the sales tax on cars and scooters.

Senior functionaries of the Haryana Sales Tax Department reveal that the Rajasthan Government has decided not to increase the sales tax at all.

They add that the Haryana Government had increased the sales tax from 4 per cent to 12 per cent on March 4, pursuant to the central government’s policy. Since the Chandigarh Administration had not accepted its suggestion for effecting the similar hike in the sales tax, the state had suffered huge loss in its revenue. No wonder Haryana was forced to roll back the sales tax to 6 per cent.

Senior functionaries of the Haryana Excise and Taxation Department say that Maruti cars are cheapest in the state. “We would like to examine all pros and cons before hiking the sales tax in the state,” they added.

By taking a lead in hiking the sales tax in this part of the country, the Chandigarh Administration is in for heavy losses in revenue, apart from giving a blow to car and scooter dealers in the city.

The sales tax in the city on cars and scooters was 4.5 per cent up to April 30. From May 1 it has been increased to 13.2 per cent, much to the discomfiture of customers and dealers.

Mr Sumesh Jawa, Manager of Modern Motors who are Maruti and Zen car dealers, says they used to sell, on an average, 10 to 12 cars a day during the pre-hike sales tax days. Ever since the sales tax increase, they have not sold even a single car.

Describing the hike in the sales tax as a foolish decision, Mr Jawa says Maruti 800cc car used to cost Rs 2,07,250, inclusive of Rs 5605.14 sales tax. After the hike in sales tax the cost of this car has shot up to Rs 2,25,420, inclusive of Rs 23,864.59 sales tax. Thus there is a difference of Rs 17,500 in each car. And remember, this does not include 10 per cent surcharge on the sales tax. If the surcharge is included the price of Maruti 800 cc car has jumped to Rs 2,25,450.79.

He explains the price of Zen car was Rs 3,03,607.49 before May 1. With the increase in sales tax, its price has gone up to Rs 3,29,160.77, excluding Rs 3,484.54 surcharge on sales tax.

Mr Jawa says in Chandigarh customers have to pay additional 3 per cent central sales tax. Thus the total sales tax charged from a customer comes to 16.2 per cent.

The sales tax in neighbouring Haryana is 6 per cent, while it is only 3 per cent in Himachal Pradesh.

Even if a customer has to hire a taxi at Rs 1,000 for going to Haryana or Himachal Pradesh for buying a Maruti car, he still saves Rs 16,500. Why should he buy a car from Chandigarh? he asks.

Mr K.C. Pandey, Sales Executive of Saluja Motors, dealers of Matiz cars, says ever since the sales tax has been increased, customers make enquires and go away.

Similar are the grievances voiced by other dealers in the city.

Cars and scooter dealers in the city paid Rs 37.82 crore during the last financial year to the Chandigarh Administration. If the customers do not buy vehicles locally, from where will the Administration get the revenue in sales tax? they ask.

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