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Old 7th August 2017, 12:32   #61
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Default Re: Effect of GST on Car Leasing

I had leased Honda City through my employer in end 2014. I was paying around Rs 27,000 per month. Post GST that has gone up to around 36,000 now. A BIG blow. GST Council will have to do something about this else all the leasing companies will fold.
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Old 7th August 2017, 19:17   #62
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Default Re: Effect of GST on Car Leasing

The Leasing company's website was not allowing for new quotes until today.
So i selected the same model i took last year and the rate is the same. However for us , Pre-GST leasers ,they had said they would increase the amt. Rs 34K to Rs 41K . This was not done for the July EMI. Going by the new Quote i am hopping things will stay the same. Waiting for an update as the website also stated if you have an existing lease please stay tuned.
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Old 8th August 2017, 11:55   #63
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Default Re: Effect of GST on Car Leasing

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Originally Posted by chennai-indian View Post
I had leased Honda City through my employer in end 2014. I was paying around Rs 27,000 per month. Post GST that has gone up to around 36,000 now. A BIG blow. GST Council will have to do something about this else all the leasing companies will fold.
GST council will not do anything and none of the Lease Companies will fold. Government knows this coupled with the fact that its not masses that are affected and hence status quo.
Why will it not affect ? All cars bought after 1 July 2017 will have same EMI as what you had before 1st July i.e. 27000 or even tad lesser. This is because that GST (being the sole tax and inclusive of Cess) at 43% is claimed as GST input credit by your employer/lease provider ( outstanding value at beginning of lease period will be 67% of ex show room price) and you pay GST @ 43% every month. Since the Base is reduced and you pay 43% on that, EMI will be at 27000
For your case ( and also mine). we got 14.5% VAT input credit in 2014 ( outstanding value at beginning of lease period was 85.5% of ex show room price) but government is collecting 43% from us and hence this ~ 30% increase.

Since, new cars wont have the issue - life of lease provider will continue to move at same pace

Last edited by Cooltronics : 8th August 2017 at 11:57.
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Old 8th August 2017, 12:09   #64
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Since, new cars wont have the issue - life of lease provider will continue to move at same pace

Those who are buying SUVs now in the interim before the proposed hike in cess to 25% will face the same issue of increased emi outgo when new cess is in place.
Is it better to wait for the cess increase to happen and then go for lease car? Or the savings from pre-hike prices will offset this loss in emi? Has someone done this calculation?

Regards
Harish
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Old 8th August 2017, 23:26   #65
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Default Re: Effect of GST on Car Leasing

I'm getting nervous after reading the TOI article on proposed cess increase to 25% from 15%:

http://economictimes.indiatimes.com/...w/59959076.cms

The article quotes Honda City - but pretty please, this cannot happen AGAIN to us -- right? From 14.5% VAT to 43% GST to 53% GST??

I have no words.
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Old 9th August 2017, 11:22   #66
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Default Re: Effect of GST on Car Leasing

I have also seen no information from my leasing company Orix after 5th august meeting . I have wrote mail to orix that if they are really taking up the matter or just fooling us.
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Old 9th August 2017, 14:27   #67
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Default Re: Effect of GST on Car Leasing

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Originally Posted by Anuruddhs View Post
I have also seen no information from my leasing company Orix after 5th august meeting . I have wrote mail to orix that if they are really taking up the matter or just fooling us.
I am in the same boat as you. But I personally feel Orix is helpless. I was really hoping that GST council would take some decision on the leased car. I was shocked to read the new recommendation of increase of cess.
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Old 9th August 2017, 15:40   #68
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Default Re: Effect of GST on Car Leasing

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Originally Posted by quadmaniac View Post
I'm getting nervous after reading the TOI article on proposed cess increase to 25% from 15%:

http://economictimes.indiatimes.com/...w/59959076.cms

The article quotes Honda City - but pretty please, this cannot happen AGAIN to us -- right? From 14.5% VAT to 43% GST to 53% GST??

I have no words.
From what I have read so far, this cess increase is for all new cars, not for leased cars specifically. The earlier increase was due to the service - financial leasing - falling in a particular bracket of GST attracting 43% GST. This cess is applicable on the upfront cost, so, should not have an impact on the existing leases as the car has already been bought by the leasing company.
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Old 9th August 2017, 16:33   #69
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Default Re: Effect of GST on Car Leasing

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Originally Posted by Dry Ice View Post
From what I have read so far, this cess increase is for all new cars, not for leased cars specifically. The earlier increase was due to the service - financial leasing - falling in a particular bracket of GST attracting 43% GST. This cess is applicable on the upfront cost, so, should not have an impact on the existing leases as the car has already been bought by the leasing company.
I have no such hope. If something as blatantly wrong as double taxation is acceptable in the eyes of the government, I really don't think they would think twice before changing the same tax structure to 53% for lease.

Remember - the tax rate for lease was exactly the same as the class of car in question - and not a flat one for all cars. If so, why would the lease rate now NOT change to 53%?

I personally feel we are too much of a minority for the government / GST council to give a damn about.

What I am surprised about is why/how come the Ola/Uber lease companies are not making a hue and cry over this. Is it because most of their cars fall under the 28% + 3% bracket?
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Old 10th August 2017, 07:27   #70
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Default Re: Effect of GST on Car Leasing

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Originally Posted by quadmaniac View Post
I have no such hope. If something as blatantly wrong as double taxation is acceptable in the eyes of the government, I really don't think they would think twice before changing the same tax structure to 53% for lease
Agree - there is no guarantee that the addl. 10% will not be applied on post GST cars or for that matter the pre GST cars.

The next meeting is on 8 Sept but it looks like rather than fixing an anamoly of double taxation related to car lease the Govt is more interested in grabbing their additonal 10% tax. The same topic of 10% addl. cess may eat up the complete Sept meeting as well...Is one meeting all that the GST Council do per month?
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Old 16th August 2017, 09:54   #71
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Default Re: Effect of GST on Car Leasing

Quote:
Originally Posted by quadmaniac View Post
I have no such hope. If something as blatantly wrong as double taxation is acceptable in the eyes of the government, I really don't think they would think twice before changing the same tax structure to 53% for lease.
Quote:
Originally Posted by vsrivatsa View Post
Agree - there is no guarantee that the addl. 10% will not be applied on post GST cars or for that matter the pre GST cars...:
Hmm in the same boat as you and confused! My company also provides Orix lease and from this month, the EMI on my SUV (bought before GST era) will attract 43% GST instead of 14% GST which was before. So are you saying that this will increase to 53% once cess hike to 25% is approved?

Since my lease is going to expire in Mar 2018, I was thinking of pre-closing this and going for a new SUV. But I guess if cess is hiked to 25%, the EMIs post cess hike will attract 53%? If this is the case, it makes sense to wait until Mar 2018 by when at least I will know the effective EMI that I need to pay or does it make sense to buy leased car before cess increase?

Last edited by Acelerar : 16th August 2017 at 09:56.
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Old 17th August 2017, 15:47   #72
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Default Re: Effect of GST on Car Leasing

That's what i hate about this Govt. no clarity on anything and keeping people to guess. I don't know still when its a clear cut double taxation case why govt is sitting on it .
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