Indian Army Imposes Restrictions on Buying Cars from CSD

The Indian Army will change the CSD rules for buying cars from June 1, 2019. The rules will now monitor the number of cars bought by the defence personnel and allow them to have one car in a period of 8-years. Earlier, no such restriction was made as they could have more than one car within the 8-year service period.

The engine restriction on the new car will be up to 2500cc and benefits expected for a regular sized car can be up to INR 75,000 through the CSD. The jawans can buy one car each during their service and retirement period, and that too up to INR 6.50 lakh (including GST) during each purchase.

The Indian parliament allots INR 17,000 crores to the CSD (Canteen Stores Department) every year and the canteen gets 50% GST rebate on their purchases. The rebate is considered as a loss to the Indian treasury by the financial institutions.

A jump of approx 200% in the last two years show that while the overall industry trends are declining, CSD car purchases are steady and required moderation. Another reason for the increase in CSD car sales is the number of cars falling under the institution and the easy availability of loans.

The services offered by the Indian Army are never mistaken for comparison with any other institution but, the officers working in the Army’s own finance department have considered this step to keep the national treasury safe from piling debts.

When considering the INR 6.5 lakh upper limit for the Jawans, they can consider car options like Maruti Swift, Hyundai i20, base variants of Nexon and even the recently launched Hyundai Venue. The upper limit for the officers has not been mentioned while the maximum number of cars in India fall under the 2500cc engine size limit for the CSD canteen.

Source