New restrictions announced on four-wheelers purchased from CSD

27/05/2019 - 14:48 CSD Cars, Announcements Prashant Singh

The Indian Army has announced new restrictions for four-wheeler purchases through CSD. These latest orders will come into effect on 1 June 2019.

As per the new restrictions, veterans with pay level 10-18 (including retired) and their widows will be allowed to buy a four-wheeler valued up to INR 12 lakh (excluding GST) only once in eight years. The engine capacity of the four-wheeler should not exceed 2,500 cc. Veterans with pay level 3A to 9 (including retired) and their widows will be allowed to purchase a four-wheeler once during their service period and once in their retirement time. The first unit can be purchased only after six years of service, and the second only after a gap of eight years. Both units must cost not more than INR 5 lakh (excluding GST), and their engine capacity must not exceed 1,400 cc.

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Civilian defence personnel in pay level 11-18 can also purchase a four-wheeler. The limit for them is one four-wheeler every eight years. The engine capacity and the price of their four-wheeler shouldn't exceed 2,500 cc and INR 12 lakh (excluding GST) respectively. Serving/retired veterans and serving civilians in pay level 11-18 who are already in possession of four-wheelers as per existing entitlements will become eligible in the following manner in the revised entitlement:

Details				Entitlement
No prior purchase of four-wheeler				Entitled
Last four-wheeler purchased prior to 01 June 2011				Entitled
Last four-wheeler purchased after 01 June 2011				On completion of eight years from the date of last purchase

Explaining the reason behind the latest revisions, Army officials said that the Parliament annually sanctions close to INR 17000 crore for the CSD canteens under the miscellaneous head. "CSD does a price negotiation for all items introduced and then a 50 per cent GST rebate is given by govt on that reduced price. Though the CSD creates a profit of almost INR 500 crore annually as CTS and deposits another approximately INR 150 crore into the consolidated fund of India, the 50% rebate is viewed as a loss to exchequer by finance authorities. Last year only, the car sales were over INR 6000 crore resulting in the budget being overshot and a carryover liability of payment to car manufacturers of INR 4500 crore." they said.

Csd Cars 2 — The revised entitlement will become effective on 1 June 2019.

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As a direct result of the boom in the Indian car market, increasing purchasing power and the easy availability of loans, the four-wheeler sales through CSD have shot up by over 200% in last two years.

[Image Source: twitter]