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Automobile trade affected by taxation
1. a l iss ue in
Ethic
uch erry
Pud n (1 1 3 97080)
ajasimma
d By R.R
P resente
2. Ethics
It is not defined
Based on the opinion of the individual
Involve a diciplin that examines good and bad
practices
3. Tax Evasion
This is a good practice to a certain extent.
But large scale involvement in such activities
results in revenue loss to the government and
come into the frame of unethical practice.
4. Automobile trade in
Puducherry in the past
Puducherry had a lower rate of taxation
compared to the neighboring states (Tamil
Nadu, Kerala, Karnataka and Andhra Pradesh).
The VAT was only 6% in Puducherry when the
VAT in other states were at 12% plus.
The road tax is a fixed rat for life in Puducherry
when it was 10% of the Automobile price
5. Scenario in the RTO
The market size for two wheelers was 5000 plus
The market size for Four wheelers was 1000 plus
The market size for Luxury segment (Vehicles
priced more than 20 lacks) was very high for a
small town at 50/month
6.
7. The issue
Registration of two wheelers from other states in
Puducherry caused an average loss of Rs.5,000/two
wheeler to the neighboring states
Registration of of Four wheelers from other states in
Puducherry caused an average revenue loss of
Rs.70,000/four wheeler to the neighboring states
Registration of luxury cars results in an average loss
of Rs.3,00,000/car
8. More revenue to
Puducherry
The customers who buy vehicles in Puducherry
usually stay in Puducherry for 3 days.
During their stay the have contributed to the
overall growth in sales of other good that are
available in Puducherry at a lower rate
9. 2011
In this year the control of Puducherry was taken
away from Congress by a newly formed party.
The VAT for two wheelers was changed to 10%
and the Vat for Four wheelers was changed to
14.5%
No friendly relationship with the ruling party of
Tamil Nadu
10. Current trend
The sale of two wheelers have dropped to
3000/month
Sales of four wheeler have dropped to
600/month
Registration of luxury brand have dropped to
10/month
11. Reasons
The Tamil Nadu RTO officials and the Police have
started troubling customers owning PY
registration vehicles and demanding them to pay
the tax of that state.
The tax difference in VAT has been neutralized
but the life tax in Puducherry is still a fixed value
irrespective of the cost of the vehicle
