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Old 7th October 2017, 19:51   #121
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Default Re: Effect of GST on Car Leasing

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Originally Posted by Cooltronics View Post
Well, inspite of knowing that existing lease car owners are double charged or rather tripple charged or more (14.5% to 50%),
It was 14.5% but credit of VAT paid while car purchase was allowed. Meaning by VAT on ex-showroom was nullified or assume no VAT charged on ex-showroom component of emi.
So effective tax rate on car lease was ~2% (14.5% on 14% interest component of emi)

Only 3 states did not allow credit. more details below:


So effective tax increase is from 2% and not 14.5% as popularly believed (unless we were taking car lease from Gujrat/Kerala/UP)
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Old 7th October 2017, 21:12   #122
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Default Re: Effect of GST on Car Leasing

My understanding of abatement is as follows.

Assuming current lease as 10000.
GST as 48% applicable is 4800
Total Lease paid is = 10000+4800= 14800.

After abatement of 35%
GST of 48% applicable on 6500 (10000-3500)
Effective GST 3120
Total Lease now is = 10000+3120 = 13120
Effectively 31.2% GST as per revised norms.

In Summary, 65% of 48%(or whatever is currently applicable GST slab) of your Lease is the new GST rate applicable for old vehichles.
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Old 8th October 2017, 21:56   #123
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Default Re: Effect of GST on Car Leasing

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Originally Posted by anubhav22 View Post
Only 3 states did not allow credit. more details below:
Image was not visible, attatching.
Correction: 4 of major states did not allow but UP was only 5%

Attached Thumbnails
Effect of GST on Car Leasing-vat_table.jpg  

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Old 9th October 2017, 08:03   #124
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Default Re: Effect of GST on Car Leasing

Quote:
Originally Posted by anubhav22 View Post
Image was not visible, attatching.
Correction: 4 of major states did not allow but UP was only 5%

[/IMG]
Hey Anubhav, what does the above mean? Does this mean we get input tax credit for the months where we paid VAT plus GST?

Also, can someone confirm - currently does the GST part become 65% of what it was? To take an example, say my base EMI was 30k (without VAT/GST whatever):

Current GST is 30k * 45% = 13.5k.

Which after announcement should become .65 * 13.5 = 8.7k

Is my understanding correct? Thoroughly confused
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Old 9th October 2017, 13:44   #125
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Default Re: Effect of GST on Car Leasing

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Originally Posted by quadmaniac View Post
Hey Anubhav, what does the above mean? Does this mean we get input tax credit for the months where we paid VAT plus GST?

Also, can someone confirm - currently does the GST part become 65% of what it was? To take an example, say my base EMI was 30k (without VAT/GST whatever):

Current GST is 30k * 45% = 13.5k.

Which after announcement should become .65 * 13.5 = 8.7k

Is my understanding correct? Thoroughly confused
VAT Application & Credit was only till July 01. And so is my chart applicability, specifying that VAT was applied and most states gave credit nullyfying it.
From July 01 we entered GST regime where VAT application and credit for car lease was stopped (GST application and credit started)

Since car purchased before July 01 had not paid GST, no GST Credit was available.
Those car had paid excise and VAT whose credit in GST regime is not allowed.

This is the double taxation that is widely spoken and impacted emi. (Paid Excise+VAT and now pay GST on whatever remaining base value.



I think below represents my understanding. Since VAT credit is disallowed, it should be:
.65 X (base value emi + VAT part of base cost + Lease charges/interest if not part of base value emi) X GST Rate
(Rest your leasing company will give exact)



On Side note:
http://www.business-standard.com/art...0700617_1.html
"
Menon said the 35 per cent abatement on GST payable on existing car leases is indeed welcome but is not good enough as still the lessee will end up paying 28-30 per cent GST as against 15 per cent service tax in the earlier regime.
"

However the service tax was not applicable so I beg to differ from this article. (Refer: https://taxguru.in/service-tax/servi...-service.html/)

VAT was there on full emi and there was credit available for it.

Looks like proper representation regarding tax impact did not reach governement or they ignored it.
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Old 12th October 2017, 17:58   #126
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Default Re: Effect of GST on Car Leasing

Just read this on Twitter. Not sure if it's regarding the same company lease policies. There was not much detail available.

Effect of GST on Car Leasing-screenshot_20171012175437_01.jpg


Mods, merge it to a relevant thread if it belongs somewhere else.

Last edited by BoneCollector : 12th October 2017 at 18:14.
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Old 13th October 2017, 14:00   #127
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Default Re: Effect of GST on Car Leasing

Few more articles on the same topic:

Leased vehicles: Government provides clarity on tax rate : URL

Leasing vehicles purchased before July 1 to attract 65% GST: URL
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Old 13th October 2017, 21:36   #128
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Default Re: Effect of GST on Car Leasing

Quote:
Originally Posted by vsrivatsa View Post
Few more articles on the same topic:

Leased vehicles: Government provides clarity on tax rate : URL

Leasing vehicles purchased before July 1 to attract 65% GST: URL
Thanks, so for understanding people like me who are pre GST, will get a discount of 35% on the existing GST.
eg my lease went up by 7K and now it will be Rs 4550/-.

Still a raw-deal but something is better than nothing.
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