The Society of Indian Automobile Manufacturers (Siam) has sought clarification from the government about the new clause in the finance bill that makes it compulsory to collect tax at source on sale of a vehicle costing over Rs.10 lakh.
The budget had proposed levying a one per cent tax on luxury cars priced above Rs.10 lakh; the dealer would have to collect the tax. However, according to Siam, while the budget speech referred only to passenger vehicles, the tax is now applicable on trucks, buses, two-wheelers and cars sold by manufacturers, exporters and dealers.
Automobile dealers fear that they too may have to pay the tax and not just the consumer. Even individuals selling their old cars for a price above Rs.10 lakh will have to collect the one per cent tax from the buyer and pay it to the government.
Source : BS Motoring
