UNFAIR TRADE PRACTICES
Prior to Liberalisation, there was a statutory body empowered to safeguard gullible consumers from unfair trade practices of the Industry called MRTPC. The presense of such a statutory body was an eye sore to all liberals who advocated self restraint on the part of the industry to avoid short changing the consumer for self interest. Now this body exists with limited powers. Last time one heard of it was when it allegedly issued notices to TATA MOTORS to pay up Excise and Sales tax collected from the customers at the time of booking for their Indica. There was a factual inaccuracy in the demand. Excise is an impost levied on manufactured goods at the time of removal from the place of manfucature. Sales tax is another impost levied at the time of sale. Sale is defined as a transaction where transfer of title to goods takes place. When TATA MOTORS had neither started manufacture nor was there any transfer of title to goods, the demand seemed to be incongruous.
This time around TATA's NANO Car, has hogged the limelight. the Car supposed to help many two wheeler owners to migrate to cars being cheap at Rs. 1 lac per Car was to be launched from West Bengal. The Singur Plant had to be closed down following still opposition from farmers and political lobbies opposed to Leftists. There were rumours that Budhdhadeb had promised hidden state subsidies of Rs.35000/ per car. Ratan Tata did not want to enter in to a compromise with Mamta even when it was brokered by Gopal Krishna Gandhi, the Grandson of Mahatma. He relocated his plant to Gujarat who again it is alleged promised state subsidies. Now presently the car is manufactured from its Pantnagar facility at Uttranchal. the bookings opened admidst much fanfare.
In the days of scarcity, one had to wait for years together to get allotment of a Bajaj Scooter which was reigning on Indian roads until Hero Honda displaced it. The black market had a premium and the company was collecting interest free deposits from future owners. Sipani Automobiles, a little known Bangalore Company known for its Dolphin, opened bookings for SIPANI D1 a Diesel version of the Car and collected huge sums of money. the Car folded up later. LML Vespa is another story when Lohia Machines tied up with erstwhile partner of Bajaj to offer scooters. They also collected huge sums of money. This advance money was only a token of affirmation of purchase as and when the vehicle is about to be delivered and mostly interest free. Nano car has to be booked for upfront payment of entire value of the car either individually or through the various banking channels who lend money to prospective buyers. This can not be purely vehicle loans because the vehicle is not immediately delivered but only an advance. TheCompany intends to accept booking for 1 lac vehicles which translates in to Rs. 1000 crores of interest free money. At the time of recession, where there are more pressing needs than owning up a car, is it fair to take such interest free deposits?
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