Sunday, July 01, 2007

Ludhiana, Mercedes and McDonalds

Two pieces in the last one week had Ludhiana in the headlines. Coming in soon after the salaried class post, it just goes on to show how money is out there, untaxed. One, about how the McDonalds there has been sending a crore of VAT collected. It is the largest VAT contributor despite having only a share of 10-15% of the market. So, have a good idea on just how much VAT is evaded or worse, collected on the pretext of VAT, but does the vanishing trick. Data on almost any town/city will result in a similar result. It is good that organized eateries/businesses like these proliferate - atleast it ensures in better tax collection. What it also shows is that there is a huge market out there - the cash market, very close to the black market that is untaxed.

The other piece, is on Mercedes in General and Ludhiana since it boasts the highest per capita ownership of Mercs in the country.

Not just in Delhi, Mumbai and Chennai — even Ludhiana has around 750, the highest density of Mercedes cars in India in terms of per capita ownership.

Be that as it may, you cannot hide a Mercedes - not under your bed or from statistics. So, there you go.

Within first five months of this year, Daimler Chrysler India has sold 1033 cars, at over over 200 every month. Not a small number for a product which targeted at the top most echelons of the society in a country that now flaunts 83,000 millionaires as per the latest World Wealth Report.

In 1999, the company sold barely 740 cars. But in the last few years, growth has been continuous and impressive. In 2004, the company sold 1815 cars. This number increased to 1915 in 2005. There was an increase of over 10% in sales in 2006 when the sales touched 2121 cars. So on average, in the ten years of its operations in India, the company has sold anything between 18,000-20,000 cars.

How about a Merc index of tax compliance in India, followed closely by a Skoda-Pajero-farmhouse-politicians index of tax compliance and then some before the finance minister unravels his latest scheme for unearthing more taxes from those who already pay?


Kavi said...

Oh boy..the big Mac paid that much. think about the others. A pointed and well articulated post. Where does all the money that gets collected as VAT go ? I am perplexed !

And Merc index is a nice idea. Hope the tax man readeth !

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