Now no cars above Rs 12 lakh for Indian defense officers in military canteens

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Serving and retired officers of the Indian Defense Force will not be able to purchase cars above Rs 12 lakh from the subsidized Canteen Stores Department (CSD) from June 1, under the new rules.

As per a letter issued by the General Quarter Branch of the Army on May 24, along with the limitation of four-wheeled vehicles above Rs 12 lakh and engine capacity of 2,500 CC, a restriction has also been placed. imposed on the frequency of purchase of vehicles.

Vehicle purchase terms have been extended from four to eight years for serving and retired officers.

“From June 1, only vehicles with an engine capacity of up to 2,500cc and costing up to Rs 12 lakh (excluding GST) will be available through the Canteen Stores Department,” the agency said. PTI press release, citing officials.

Until now, there was no limit on the capacity or price of vehicles that could be purchased through the CSD.

The decision will hamper the plans of officers who were looking to buy SUVs costing more than Rs 12 lakh or with an engine capacity above 2,500 CC.

According to the new order, other ranks or jawans, in the pay grade of 3A to 9, will be allowed to buy a car once during their regular service and once after retirement not above 5 lakh – the gap being eight years old.

Officials said those in pay grades 3A and 9 can purchase vehicles with a capacity of up to 1,400 CC.

Earlier, NDTV reported that outgoing Navy Chief Admiral Sunil Lanba purchased a brand new Jeep Compass from CSD days before the new rule was implemented.

The base variant of the Jeep Compass has an on-road price of over Rs 15 lakh. The top variant is priced at over Rs 20 lakh.

WHY BORDERS HAVE BEEN IMPOSED

In the canteens of the CSD, the defense personnel, including the civilians who work there, achieve a minimum saving of around Rs 75,000 on the purchase of cars compared to the market price.

Explaining the reasons, army officials said that about Rs 17,000 crore per year is sanctioned by Parliament for CSD under various heads.

“CSD does price negotiation for all items introduced and then 50% refund of GST is given by the government on this reduced price. Although CSD creates a profit of nearly 500 cr per year as CTS and deposits another approximately Ra 150 crore in the consolidated fund of India, the 50% rebate is considered a loss to the treasury by the financial authorities,” they said.

In the past two years, more variants have been introduced in the market and CSDs, easy loans and higher purchasing power, the sale of cars has soared by more than 200%.

“Last year alone, car sales exceeded Rs 6,000 crore resulting in over budget and deferred payment liability to automakers of Rs 4,500 crore,” the officials said.

(with contributions from the agency)

READ | Defense budget 2019: Why the highest ever Rs lakh crore subsidy is still not enough

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