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Thursday, March 29, 2012

By Pawan Rana

Corporate car sales mayday around as Maha govt doubles MVT

As soon as the motor vehicle tax (MVT) is increased in Maharashtra, cars in there will become expensive. The proposed tax hike will be effective from April 1 and it would be the corporate customers who will be the ones for whom the tax has been doubled and thus the corporate car buyers will have to pay more for cars. Among the cars that are sold most in corporate sector are Mahindra Scorpio, Tata Indigo, Volkswagen Vento, and Maruti Swift Dzire besides the premium segment cars. As per a survey the corporate customers account for over 10 percent of the total sales in the state.  

Mahindra Scorpio Pictures

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The Maharashtra government has proposed a hike of 2 to 4 percentage points hike in the MVT on petrol and diesel cars. The current MVT on cars with a price up to Rs 7 lakh is 7 percent while for cars priced between Rs 10 lakh to Rs 20 lakh it is 8 percent and is 9 percent on cars priced about Rs 20 lakh. With the new tax hike in place Maruti Swift Dzire that has an ex-showroom Mumbai price of Rs 5.12 lakh will have the registration tax of Rs 48,000 for individual buyers while it was Rs 37,000 when the tax percentage was 7.2 percent. However, for the corporate customers it will be over Rs 90,000.  

Volkswagen Vento Pictures

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Thus buying cars in the name of the company will be costly compared to cars bought in individual’s name. Experts believe that such an increase will force people to go for car purchases in the name of individuals and not in the name of the company. Thus it will be like the government is forcing companies to find ways to save from this doubled tax.


Maruti Swift Dzire Pictures

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On the other hand, this move will also force the companies to buy cars in the company name from their offices placed outside Maharashtra where the tax on corporate customers is still less. Besides, several auto companies and organization such as Society of Indian Automobile Manufacturers has sent an appeal to the Maharashtra government to keep the tax on corporate sales as it is considering that it will be detrimental to the corporate sales of cars.

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