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  1. Sharath
  2. New Cars, Reviews
  3. Friday, June 17 2016
Dear Team,

Question: Discount offers applicable on Ex-Showroom or on On-Road Price ? If on-road why?

Road Tax and insurance amount are paid to govt and insurance company right they are not part of invoice. What i think is dealer will raise invoice for Ex-showroom price only and we will pay road tax for which separate receipt will be given saying road tax is paid to govt.

Insurance any how it is our interest either we can buy from dealer or online or some other insurance executives which again is a separate receipt

Extended warranty is also sold separately which is again a receipt.

Could you please help me getting clarity on this. approx 1 year back i remember for my respective Manager who purchased Mahindra vehicle, Mahindra dealer gave discount on Ex-Showroom price only. On discounted Ex-Showroom price only they calculated road tax and insurance etc. so all over he got good discount and saved on road tax and insurance amount too.

In General Manufactures if they give discount example Rs.10000/- then it should be applicable on Ex-Showroom price only.

In case if dealer is giving any discount from their end even though manufacturer is not giving any discount then they can give on on-road price may be they may reduce in insurance zero dep amount or extended warranty amount, accessories etc..

Please help in understanding as this kind of doubt others also might have i think.

Thanks in advance.
Admin Accepted Answer

The rule statement varies
For instance: RTO Chandigarh - does not take VAT into consideration for calculation of road tax
So, if a vehicle ex-showroom say is 5 Lakh
For Road Tax, Invoice Price will be taken without VAT - will be calculated on (Exshowroom Price 5 Lakh) - (12% VAT) = Rs. 4.4 Lakh approx and this will be the base amount for calculation of road tax

Thus road tax would be 6% of 4.4 Lakh = 26400 as against other states which charges road tax on Ex-showroom price

While Chandigarh is one case, in other States / UTS - For road tax calculation - in Delhi, Mumbai, Bangalore, Chennai, Hyderabad, Ahmedabad etc The discounts are not factored on the exshowroom price and thus the tax is imposed on the entire ex-showroom price of the car.

As per Motor Vehicle Act - Road Tax Payments for Private Vehicle is to be paid on the Purchase Price of the asset.To curb - under invoicing (which was happening earlier) for tax evasion, now RTO Offices compute road tax - only at the standard Exshowroom Price - which remains same with all dealers in the same city.

Similarly for Car Insurance - its calculated at 95% of ex-showroom price for the 1st year (unless someone taking return to invoice cover).

Hope should help !!

  1. more than a month ago
  2. New Cars, Reviews
  3. # 1
nitin Accepted Answer
Kya Datsun me Ex-showroom price per discount diya jata hai ?+

  1. more than a month ago
  2. New Cars, Reviews
  3. # 2
Anant Accepted Answer
Company gives discounts like cash discount, exchange discount, corporate discount.
Are these discounts deducted from base price (I.e. exshowroom price - gst -cess) or on exshowroom price
For e.g.
If discounts are deducted from base price then
Base price of amaze=621269
Discounts = 29000 (company offer of 10k + 15k + 4k upfront)
So 28% GST on 592269 + 1% compensation cess on 592269=764027 total

If discounts deducted on exshowroom price
Exshowroom price of amaze =801438 inclusive of gst and cess
Difference 772438-764027=8417

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