Top Economist Slams Govt For Massive 48 % Tax On Cars

One of the major problems that many middle-class Indians are currently facing is the tax burden. In India, we pay tax on almost everything. Recently, a post by a social media user on X expressed frustration about the taxes on a car he recently bought. The post has gone viral, and after this post, a comment made by former economist Mr. Surjit Bhalla has also started circulating online.

We’ll start with the social media post first. The user, Venkatesh Alla, posted his frustration over the 48 percent tax on his car. He attached the receipt of the car with a caption:

“48% tax on buying a car, and that’s after already paying 31.2% income tax. What is this, @FinMinIndia? Is there no limit to this daylight robbery? Your incompetence and inefficiency are dragging India backward. This is absolutely shameful!”

He mentioned that every salaried person in the country who earns ₹1000 pays ₹340 as income tax. “Out of the remaining amount, ₹200 spent on petrol carries a tax of ₹110. ₹200 spent on education incurs ₹36 in GST. ₹100 spent on insurance includes ₹18 in GST. ₹100 spent on books and stationery has ₹18 in GST. If he saves ₹100 and earns ₹50 in interest, he pays ₹10 as capital gains tax.”

“What remains? Just ₹300 — out of which expenses like toll fees, hospital bills (with GST), rent, groceries, and entertainment still need to be covered. Over 50% of our income is swallowed by the government. And what do we get in return? Poor air quality, pothole-ridden roads, rampant corruption, a sluggish judiciary, crumbling public infrastructure, and soaring inflation.”

In this post we can see that the reciept mentions 14 percent SGST, 14 percent CGST and 20 percent CESS. This brings the total tax to 48 percent on a car that only costs Rs 14.58 lakh. With the 48 percent tax in place, the cost of the XUV700 goes all the way to 21.59 lakh.

After this post went viral, a statement made by the former IMF Executive Director Surjit Bhalla in a recent interview has resurfaced online. In the interview, Surjit Bhalla told NDTV that data released by the IMF, OECD, and World Bank states that India is overtaxing its citizens to an extent not seen anywhere else.

He stated that India’s tax-to-GDP ratio is 19 percent, which is higher than East Asian countries like China and Vietnam, which maintain a rate of 14.5 percent. He said, “China has been growing faster, and East Asia has thrived. So why aren’t we studying their taxation models? We are taxing like Korea and the US—countries ten times wealthier than us. The government needs to explain this.”

The comment section under this post is filled with similar sentiments. Some of the comments include: “Hope all states are ready to think about reducing cess!! Before 2027, no chance of reducing the 28% GST highest slab rate!! Better to tag @GST_Council and at least your STATE FM for this ..!” “Road tax and insurance remain to be added. A point to be noted is that there’s 18% GST over the insurance amount too.” “They do robbery during daylight only—that’s how an administration works.”

The next Union Budget is around the corner, and we hope that Union Finance Minister Nirmala Sitharaman considers the fact that the middle-class man’s income is vanishing under rising levies. All we can do as tax-paying citizens of this country is hope that things improve in the near future.