![]() | #91 | ||
BHPian Join Date: Aug 2012 Location: Hyderabad, AP
Posts: 29
Thanked: 28 Times
| ![]() Quote:
1. VAT was applicable on sale of old cars but GST is not. Please Refer: http://www.firstpost.com/business/gs...t-3810325.html and https://gst.taxmann.com/topstories/1...under-gst.aspx (further details and how leasing companies are taking this are awaited. Some believe it is only for personal cars) 2. Every car employee leases, give depreciation benefit to employer or leasing company depending on financial lease or operating lease OR how it is on books. Govt allows 20% depreciation on written down value which is adjusted against companies profit's thus reducing companies taxable income. Indicative e.g. Taxable income of company = 100L, Tax=35L First year Depreciation on 20L Car = 4L New Taxable Income= 96L, Tax= 33.6L; Saving =1.4L Second year depreciation = 20% of 16L = 3.2L; Saving = 1.12L and so on. Many companies give free insurance/road tax/registration/tyre change as a policy of "give it back", probably as they do not want to retain the earnings which are solely due to employee going for lease. I also know of a big IT company that has absorbed all of tax increase due to GST. In the end, it is all about money ![]() Hope this helps! Quote:
Leasing companies can also pass on by reducing the interest rate to lower single digit (say in case where leasing companies has the car on it's books) For Govt's ntend I quote: " Government sources told TOI that the leasing companies did not appear to have a strong case as they had claimed depreciation benefit, which negated the impact of the higher tax. " from http://timesofindia.indiatimes.com/b...w/60433440.cms Last edited by benbsb29 : 11th September 2017 at 11:30. Reason: Merged back-to-back posts. Please use the Multi-quote button to reply to more than one post at a time. Thanks. | ||
![]() | ![]() |
|
![]() | #92 | |
BHPian Join Date: Aug 2012 Location: Hyderabad, AP
Posts: 29
Thanked: 28 Times
| ![]() Quote:
That is why people who closed by 30 June are in better situation. Having said that, all is not lost. Make sure you get the other components sweetend by your organisation like fuel, maintenence, driver etc so as to cover all your costs where you will continue to save tax | |
![]() | ![]() |
![]() | #93 |
BHPian ![]() Join Date: Apr 2005 Location: Chennai
Posts: 104
Thanked: 60 Times
| ![]() Any idea if there has been any representation to the Finance Ministry on this and who has made the representation? Mods excuse, if this has already been answered. Thanks. |
![]() |
![]() | #94 | |
BHPian ![]() Join Date: Dec 2007 Location: Hyderabad
Posts: 423
Thanked: 111 Times
| ![]() Thanks for the excellent explanation Anubhav! Quote:
Would really appreciate this info - thanks ![]() | |
![]() |
![]() | #95 | |
BHPian Join Date: Aug 2012 Location: Hyderabad, AP
Posts: 29
Thanked: 28 Times
| ![]() Quote:
This prevents "Connecting People" ![]() On the flip side, there are corporate(s) that have done away with this policy all together. (Can't say using this company's reference was one of the reason). Good luck! | |
![]() |
![]() | #96 |
BHPian ![]() Join Date: May 2016 Location: Bangalore
Posts: 38
Thanked: 68 Times
| ![]() hi All, Attended CNBC GST live session yesterday, I think we need to escalate the case of double taxation and formally reach out to the Government. Also request to support the campaign below https://www.change.org/p/finance-min...ting-car-lease Regards, Anzy |
![]() | ![]() |
![]() | #97 | |
BANNED Join Date: May 2016 Location: MH-12
Posts: 55
Thanked: 102 Times
Infractions: 0/1 (5) | ![]() Quote:
Is this video of the discussion of CNBC? I personally feel that affected people should form a consortium & fight a legal battle if required. | |
![]() | ![]() |
![]() | #98 |
BHPian ![]() Join Date: Jun 2008 Location: bangalore
Posts: 75
Thanked: 22 Times
| ![]() I am loosing significant amount on this ruthless unprepared implementation of GST on existing leased cars. I am ready to contribute for the legal battle against this illegal double taxation imposed on honest tax payers. |
![]() |
|
![]() | #99 |
BHPian Join Date: May 2011 Location: BANGALORE
Posts: 57
Thanked: 40 Times
| ![]() There is absolutely no response from the government to tweets. Can someone please help put together a short paragraph defining the issue for me? While I appreciate that excise was paid during buying the car, it was paid by the leasing company. Which in turn factored it into the monthly payout. And now GST hits the entire EMI instead of the service tax. Have I got this right? Best regards SNS |
![]() |
![]() | #100 |
BHPian ![]() Join Date: Jun 2008 Location: South Pole,Mars
Posts: 696
Thanked: 400 Times
| ![]() We are wasting our time and efforts on this. Better still, do your calculations and see if leasing is profitable vis a vis tax outgo, and then either foreclose or continue with EMI's...govt and their GST council will remain mum spectators on this. |
![]() |
![]() | #101 | |
BHPian Join Date: Aug 2012 Location: Hyderabad, AP
Posts: 29
Thanked: 28 Times
| ![]() Quote:
Since car lease service fell under pervious VAT regime, VAT was applied on whole emi, however majority of states allowed VAT credit based on amount of VAT already paid on ex-showroom price. So effective additional VAT paid was only on interest and leasing charges. (Around 14.5% of 15% = ~2.2%). Now same cars under GST have lost the credit of VAT. Since GST has included excise which was already part of base cost in ex-showroom, the total tax incidence has increased rom 14.5% to 31 to 49% Since GST on leasing is under same category as car, so the emi is getting charged GST BUT with no credit of VAT or excise. Previous Lease tax = VAT with credit (no excise charged hence no credit needed) New Lease tax = GST with no credit of VAT and excise This is double taxation as user has to pay additional 49% GST on total emi amount without 35% excise credit and without 14.5% VAT credit. Governemnt is very much aware and reluctant to solve this. Hope this helps. (P.S.: This also means 15% of interest and lease cost actually become 22.5% with application of 49% GST on it. Ex-showroom GST of 49% will get setoff. This is going to impact the business model for new leases post July01 as well. But some other time...) | |
![]() | ![]() |
![]() | #102 | ||
Distinguished - BHPian ![]() ![]() | ![]() Leased vehicles may get GST relief. Quote:
Quote:
link Last edited by volkman10 : 6th October 2017 at 08:32. | ||
![]() | ![]() |
![]() | #103 |
BHPian ![]() Join Date: Aug 2009 Location: bangalore
Posts: 478
Thanked: 657 Times
| ![]() |
![]() |
![]() | #104 |
BHPian ![]() Join Date: Dec 2007 Location: Hyderabad
Posts: 423
Thanked: 111 Times
| ![]() Isn't the cab part mentioned on only the "renting"? For leased, hope they don't differientiate, and treat the corporate employees as rich folks who can afford to pay such a huge tax increase! |
![]() |
![]() | #105 |
BHPian Join Date: Sep 2006 Location: Bangalore
Posts: 169
Thanked: 69 Times
| ![]() The JK Fin Min just announced on Live TV ( CNBC ) that there is a reduction, but he doesn't remember by how much it is cut down. So there is relief for lease. Fingers crossed ![]() Last edited by tortoise : 6th October 2017 at 19:50. |
![]() | ![]() |