Army imposes restrictions on purchase of cheaper cars from CSD

Under the new restrictions imposed by the Indian Army to cut down the expenditure of CSD canteens on vehicles, the officers can buy vehicles valued upto Rs 12 lakh excluding GST, an Army order issued in this regard said.

As per the new rules which will come into effect from June 1, the officers would be allowed to purchase cheaper cars from CSD canteens only once in eight years and the cars should be upto 2500 cc engine capacity, the order said.

After the new order, jawans would be allowed to buy cars once during their regular service and once after retirement worth around Rs 6.5 lakh including GST.

In the CSD canteens, the 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.