Starting 1st June 2019, India Army is going to impose strict restrictions on the sale of cheaper vehicles from CSD canteens. Currently, CSD canteens offer a minimum saving of Rs 75,000 on the purchase of a car in comparison to its market price. These saving are exclusively offered to Amry personnel along with the civilians working there. When these new restrictions come in to play, officers will be able to buy vehicles which are valued up to Rs 12 lakh (including GST) from CSD. Furthermore, they will only be able to purchase cheaper cars from CSD canteen once in eight years. The additional clause is that the engine capacity of these cars should be up to 2500 cc.
For the jawans, the new restrictions limit the purchase of a new car from the CSD canteen only once during their regular service and once after the retirement. And the price of the said vehicle has been limited to Rs 6.5 lakh which includes GST. The reason cited for imposing these restrictions is to put an end to social disparity along with reducing the expenditure towards the procurement of vehicles.
Rs 17000 crore is sanctioned annually by the Parliament for CSD under the miscellaneous head. According to Army officials, the CSD does a price negotiation for all the 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 crores 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.
With the introduction of new variants in the last two years in the market as well as the CSD, along with the easy availability of loans coupled with a higher purchasing power has resulted in a 200 per cent increase in the sale of cars. According to the officials, in 2018, the total cost of cars sold stood at Rs 6000 Cr. As a result of this, the budget got overshot and a carryover liability of payment to car manufacturers of Rs 4500 crore.