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Old 12th November 2009, 14:44   #16
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Originally Posted by aatish View Post

Both the cars were purchased from owners for me I was willing to take the challenge of putting these cars into shape not a lot of people are upto that. The X-trail was very unique and sold by leela after a total loss given by the insurance company.

When total loss is declared by the insurance company, they take car and pay the money to the user AFAIK. If the owner sells the car, then whats the role of insurance company?
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Old 12th November 2009, 15:13   #17
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ok couple of more doubts.
firstly did the x-trail sell for 12 lakhs in 2005?? thats a bit tough to believe considering now its for approximately 24 lakhs.
and secondly do you have to fly down to the United Kingdom to make the purchase or is it done online?
cant resist myself from asking all this. its so tempting.
PS: considering these prices could you hook me up with an 4 year old accord for like 2ish..
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Old 12th November 2009, 15:23   #18
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In some cases they also value the cost of the salvage and only pay the differential in case the owner wants to retain the wreck and that's what happened in t his case
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Old 12th November 2009, 15:57   #19
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That what we call it as a good deal. What shade paint did you use for it?
Can pls post the latest pic?
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Old 12th November 2009, 16:03   #20
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Hey Aatish,

A very interesting project you have on hand here. The car looks to have suffered minor structural damage, and the interiors are pretty fresh. Best of luck on the restoration.

Which part of Goa are you based in?

Quote:
Originally Posted by akshaymahajan View Post
firstly did the x-trail sell for 12 lakhs in 2005?? thats a bit tough to believe considering now its for approximately 24 lakhs.
I think I can answer that. You see, Hotel groups like Leela are allowed to import capital goods (read cars) under the Export Promotion Capital Goods scheme. Instead of the usual 100pct plus customs duty, they need to pay only 5 pct duty. The catch is they must generate foreign exchange income which is 8 times the value of the capital good, over the next 8 years.

Now do the math. An X trail's manufacturing cost (remember it comes in as a CBU) would be around 11.5 lakhs. Take 5pct on that, and the landed cost comes to 12 lakhs. Take 110 pct, and the cost comes to 24.15 lakhs.

QED?

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Originally Posted by aatish View Post
In some cases they also value the cost of the salvage and only pay the differential in case the owner wants to retain the wreck and that's what happened in t his case
Sorry for going OT. This actually raises an interesting legal loophole.

Under normal circumstances, an individual would not have access to a capital asset brought under the EPCG scheme, until the period of the EPCG contract gets over (or if he agrees to pay the differential customs duty). But by creating an artificial accident (the insurance surveyor would have to be in the loop) and declaring the asset irrepairable, it may be possible to own an imported car with 5 pct duty.

Oh darling, yeh hai India
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Old 12th November 2009, 16:28   #21
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Originally Posted by aatish View Post
Both these cars are intended for personal use. The choice was getting a brand new Chevorlet optra magnum or get two of these cars and fit it within the cost of a new chevorlet magnum i.e 12.5 lacs. Only hitch here is no bank is willing to finance a wreck

Well if you manage to get spares the way I did they cost just about the same as swift diesel spares :-)

Both the cars were purchased from owners for me I was willing to take the challenge of putting these cars into shape not a lot of people are upto that. The X-trail was very unique and sold by leela after a total loss given by the insurance company.
Hi Aatish, Those are amazing deals you got there. And to be able to get spares at those prices, man, you could make a killing making a business of this. BTW, Any other cars lying with the same garage that are going cheap and could be repaired with your contacts? I would love to have a luxury car for these prices.
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Old 12th November 2009, 17:04   #22
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Quote:
Originally Posted by predatorwheelz View Post
Hey Aatish,

A very interesting project you have on hand here. The car looks to have suffered minor structural damage, and the interiors are pretty fresh. Best of luck on the restoration.

Which part of Goa are you based in?



I think I can answer that. You see, Hotel groups like Leela are allowed to import capital goods (read cars) under the Export Promotion Capital Goods scheme. Instead of the usual 100pct plus customs duty, they need to pay only 5 pct duty. The catch is they must generate foreign exchange income which is 8 times the value of the capital good, over the next 8 years.

Now do the math. An X trail's manufacturing cost (remember it comes in as a CBU) would be around 11.5 lakhs. Take 5pct on that, and the landed cost comes to 12 lakhs. Take 110 pct, and the cost comes to 24.15 lakhs.

QED?



Sorry for going OT. This actually raises an interesting legal loophole.

Under normal circumstances, an individual would not have access to a capital asset brought under the EPCG scheme, until the period of the EPCG contract gets over (or if he agrees to pay the differential customs duty). But by creating an artificial accident (the insurance surveyor would have to be in the loop) and declaring the asset irrepairable, it may be possible to own an imported car with 5 pct duty.

Oh darling, yeh hai India
Akshay that answers our question, predator I did not think about the last point but yea YEH HAI INDIA. Though in this case the accident was'nt artificial the IDV of the vehicle was 8,00,000 on the day of the accident and with cost of spares from Nissan India being very high cost of setting the vehicle back on track was over 6,00,000. Hence it was a better deal of the company to pay the leela guys a total loss and give them the possession of the vehicle. Enter me and i managed to get the wreck of leela's chest I wonder what they would say once she is back on the road.

NO i did most of the buying online and on phone had the parts shipped to a friends address in London and then flew them down when I went for my business work ;-)

Thanks ramsagar I have gone with a dark grey that was sold by nissan Australia and nissan Mauritius did not launch in the Indian market will post in work pictures today

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Last edited by Technocrat : 12th November 2009 at 18:47. Reason: Please read the note in your post, thanks
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Old 12th November 2009, 17:27   #23
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Hi aatish,

looking forward to seeing pics of the final deal today!

You really got a sweet deal! X-trail and C-class for roughly the price of a optra magnum! Awesome.

cheers
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Old 12th November 2009, 17:30   #24
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So all the nissan vehicles in leela are imported and not bought from the local showroon (there are quiet a few x-trail n teana in BLR). So the valuation of the car is also 11L in india eh ???
so Big hotels can buy cars payin 5% duty and sell it here when ever they want is it ? (as per this case)
And what about transferring the registration? as it came through EPCG scheme..

does this procedure hold good for all the imported cars??

What about the CARNET vehicles?

Last edited by livyodream : 12th November 2009 at 17:31.
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Old 12th November 2009, 17:35   #25
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Quote:
Originally Posted by livyodream View Post
When total loss is declared by the insurance company, they take car and pay the money to the user AFAIK. If the owner sells the car, then whats the role of insurance company?

AFAIK, when a total loss is claimed, the vehicle is taken off the record from the RTO. Where is the question of converting it to private vehicle when there is no record of it at all ?
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Old 12th November 2009, 17:53   #26
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Whoa! Lotsa questions! Lets go step by step.

Quote:
Originally Posted by livyodream View Post
So all the nissan vehicles in leela are imported and not bought from the local showroon (there are quiet a few x-trail n teana in BLR).
Not only all the Nissan vehicles, but all imported cars used by all large hotel chains are brought in through the EPCG scheme. In return, the hotel has to satisfy EPCG requirements (FEX income worth 8 times the value of the good in 8 years)

Quote:
Originally Posted by livyodream View Post
So the valuation of the car is also 11L in india eh ???
No. The 11.5L I quoted is the total cost of the vehicle (manuf cost + overheads + selling and distribution expenses). The valuation in India would be inclusive of customs, 5pct or 110pct as the case may be.

Quote:
Originally Posted by livyodream View Post
so Big hotels can buy cars payin 5% duty and sell it here when ever they want is it ? (as per this case)
And what about transferring the registration? as it came through EPCG scheme..
No they can't. I've already clarified this. In order to be sold, the vehicle either must have completed EPCG revenue requirements, or the subsequent buyer should be ready to pay the differential customs duty while taking delivery.

Which idiot will buy a used car paying 105pct of its original factory price as duty?

Quote:
Originally Posted by livyodream View Post
does this procedure hold good for all the imported cars??
Yes, as long as it is purchased by a valid EPCG licensee. The maximum benefit is derived for CBU imports, as the duty structure is the highest.

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Originally Posted by livyodream View Post
What about the CARNET vehicles?
CARNET is something different. Lets explain this with an example.

You're an UK citizen who wishes to tour India on his Land Rover. To allow the car here, the govt of UK must issue a Carnet De Passage to the govt of India, which is nothing but an international guarantee agreeing to cover the import duty and taxes in case the Land Rover does not make it out of India.

Mind you, its a Guarantee, which means payment of customs duty is not required in good faith.
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Old 12th November 2009, 18:15   #27
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couple of more questions:
First even if the car is written off after an accident before meeting the EPCG revenue requirements can it be sold without the buyer paying the dues or not?
Secondly any idea on how much a carnet de passage costs?
And third do you import vehicles under EPCG?
This is my last and final set of questions.
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Old 12th November 2009, 18:25   #28
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Quote:
Originally Posted by predatorwheelz View Post
Whoa! Lotsa questions! Lets go step by step.



Not only all the Nissan vehicles, but all imported cars used by all large hotel chains are brought in through the EPCG scheme. In return, the hotel has to satisfy EPCG requirements (FEX income worth 8 times the value of the good in 8 years)

Asking out of curiosity, what if they are unable to satisy in 8 years?

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Originally Posted by predatorwheelz View Post
No they can't. I've already clarified this. In order to be sold, the vehicle either must have completed EPCG revenue requirements, or the subsequent buyer should be ready to pay the differential customs duty while taking delivery.

Which idiot will buy a used car paying 105pct of its original factory price as duty?


what about this case then? is it also like - when a total loss is claimed on an imported vehicle brought under EPCG without satisfying EPCG requirements , can be sold too ?

the question here is when a total loss is claimed on a vehicle, it should be off the RTO records (AFAIK). Then how can one re-register it?

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Last edited by Technocrat : 12th November 2009 at 18:48. Reason: Please read the note in your post, thanks
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Old 12th November 2009, 19:19   #29
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@Aatish - Really sorry to be hijacking your thread dude. My whole objective was just to clear out a few doubts. Please dont get mad at us!

Quote:
Originally Posted by akshaymahajan View Post
First even if the car is written off after an accident before meeting the EPCG revenue requirements can it be sold without the buyer paying the dues or not?
The exporter has the right to file exemption from dues, in case of physical destruction of the asset. However the dues upto the date of destruction (i.e. when the asset was still in use) must be cleared in all cases.

Quote:
Originally Posted by akshaymahajan View Post
Secondly any idea on how much a carnet de passage costs?
Its not available for love or money. AFAIK, only US and UK governments issue Carnet De Passage for their cars.

Quote:
Originally Posted by akshaymahajan View Post
And third do you import vehicles under EPCG?
Ah, this I forgot to add. Vehicle import is allowed under EPCG only if the importer is a Hotel chain or a Travel and Tour operator. The key point here is that the asset must be adding value to the exporter's line of business. So any manufacturing company would not be allowed to import vehicles under EPCG, for its directors to move around!

Quote:
Originally Posted by akshaymahajan View Post
This is my last and final set of questions.
I dont mind as long as the thread owner doesnt mind!

Quote:
Originally Posted by livyodream View Post
Asking out of curiosity, what if they are unable to satisy in 8 years?
Normally doesnt happen. There are various escape routes available to the exporter. Even if he cannot satisfy the revenue requirement through the direct business (for which the vehicle was imported) he can net off by showing excess FEX revenue from his other businesses.

In the event that all the escape routes are closed, the simple solution is to pay off the balance duty.

Quote:
Originally Posted by livyodream View Post
is it also like - when a total loss is claimed on an imported vehicle brought under EPCG without satisfying EPCG requirements , can be sold too ?

the question here is when a total loss is claimed on a vehicle, it should be off the RTO records (AFAIK). Then how can one re-register it?
This I dont know. As I already said, there must be some sort of legal loophole (as evident in Aatish's case) through which a total loss asset can be sold off and re-registered.
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Old 12th November 2009, 19:51   #30
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Its not available for love or money. AFAIK, only US and UK governments issue Carnet De Passage for their cars.

Super duper .

What about HH karizma in MTV roadies? they took it to australia and this time hopefully to Africa. How do they take it there ?

Last edited by Technocrat : 13th November 2009 at 19:35. Reason: fixed quote
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