Now no cars above Rs 12 lakh for Indian defence officers at military canteens

Serving and retired officers of the Indian defence forces will not be able to buy cars above Rs 12 lakh from the subsidised CSD (Canteen Stores Department) from June 1, as per new rules.

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

The duration of the purchase of vehicles has been increased from four to eight years for serving and retired officers.

"From June 1, only vehicles with engine capacity up to 2,500 CC and costing up to Rs 12 lakh (excluding GST) will be available through Canteen Stores Department," news agency PTI said, quoting officials.

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

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

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

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

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

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

WHY CURBS HAVE BEEN IMPOSED

In the CSD canteens, defence personnel, including civilians working there, get a minimum saving of around Rs 75,000 on purchase of cars in comparison with the market price.

Explaining the reasons, Army officials said approximately Rs 17000 crore annually is sanctioned by Parliament for CSD under miscellaneous heads.

"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 500 cr annually as CTS and deposits another approximately Ra 150 crore into the consolidated fund of India, the 50 per cent rebate is viewed as a loss to exchequer by finance authorities," they said.

In the last two years, more variants being introduced in market and CSD, easy loans and higher purchasing power, sale of cars has shot up by over 200 per cent.

"Last year only, the car sales were over 6000 cr resulting in the budget being overshot and a carryover liability of payment to car manufacturers of Rs 4500 crore," the officials said.

(with agency inputs)

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