![]() | #1 |
BHPian ![]() Join Date: Dec 2007 Location: Hyderabad
Posts: 423
Thanked: 111 Times
| ![]() Another twist - effect of gst on lease : http://m.economictimes.com/industry/...w/59077439.cms Not sure I quite follow the net effect. Does this mean our end payment increases? Or the EMI as well? |
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![]() | #2 | |
BHPian ![]() Join Date: Jun 2006 Location: San Francisco/Nagoya
Posts: 39
Thanked: 15 Times
| ![]() We have an email today from our company car lease team that we would be paying more. Eg: for a car with an engine that is more than 1200CC, the increase in monthly lease payment is close to 25%. They have given us the option to exit the lease. Quote:
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![]() | #3 |
BHPian ![]() Join Date: Dec 2007 Location: Hyderabad
Posts: 423
Thanked: 111 Times
| ![]() Read this: http://www.mycarhelpline.com/index.p...8635&Itemid=78 For me, I'm in a huge soup. My EMI went from 33k (pretax) to 42k. Old EMI - VAT (14.5%) + GST (43%). This is a deal breaker :( |
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![]() | #4 | |
BANNED ![]() Join Date: Sep 2004 Location: NCR
Posts: 3,186
Thanked: 1,328 Times
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Lets wait for government's reply/reaction - until then one need not worry i think. about double taxation. Last edited by DCEite : 23rd June 2017 at 22:23. | |
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![]() | #5 | |
BHPian ![]() Join Date: Dec 2007 Location: Hyderabad
Posts: 423
Thanked: 111 Times
| ![]() Quote:
![]() Which means that if they do not agree to input tax credit, it will be too late for foreclosure. Reason: foreclosing today attracts 14.5% VAT. Foreclosing on July 1st will attract 43% GST (for my class of vehicle). If this is not ![]() | |
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![]() | #6 |
Senior - BHPian ![]() Join Date: Jan 2014 Location: Bangalore
Posts: 1,452
Thanked: 2,978 Times
| ![]() Please sign the Change.org Petition as well: https://www.change.org/p/finance-min...ting-car-lease Let us hope the Govt, does something about this unfair double taxation. |
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![]() | #7 | |
Senior - BHPian Join Date: Sep 2008 Location: DL9C
Posts: 3,002
Thanked: 3,844 Times
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But if this tax rate continues, will this be the end of car lease programs in private companies? Maybe the ruling class doesn't want an iota of benefit to the common man, and this was a pre-planned exercise. | |
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![]() | #8 | |
BHPian ![]() Join Date: Jun 2008 Location: South Pole,Mars
Posts: 696
Thanked: 400 Times
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three categories - and revised rates post GST - small car + petrol = 28% + 1% small car + diesel = 28% + 5% SUV/Big Sedans = 43% Its a big big impact on middle class. For higher income bracket, this would probably make no difference. | |
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![]() | #9 | |
BHPian ![]() Join Date: Jun 2008 Location: South Pole,Mars
Posts: 696
Thanked: 400 Times
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Here is what I got for my Celerio ZXI AMT - ![]() | |
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![]() | #10 |
BHPian Join Date: Nov 2010 Location: Bangalore
Posts: 490
Thanked: 279 Times
| ![]() I'm one of those running around to mobilize funds to foreclose today. I got to know from my company just this morning (the last date of pre-GST era) and was given an option to foreclose at existing ST rates. I own an SUV, and the GST rate is a ridiculous 43% tax on base rentals. From 14.5%, to 43%. Long live GST !!! Most of my colleagues are in disbelief and really put in spot. Worst case, we have to bite the bullet and end up paying a ridiculous 43% tax on a depreciating asset. To rub salt in the wound - The Leasing agency has sent a 'marketing' email to my company that with GST, the tax benefits on leasing car will increase since the overall EMI will increase !!! ![]() |
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![]() | #11 | |
BANNED Join Date: May 2016 Location: MH-12
Posts: 55
Thanked: 102 Times
Infractions: 0/1 (5) | ![]() Quote:
I personally feel, rather than wasting energy with employer or leasing company, people should appeal government. The petition is a god start. I am personally raising a grievance with PMO. There is no news in media on rumored 30th June meeting. Hope that we are given a relief by the government. | |
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![]() | #12 |
BHPian ![]() Join Date: Jul 2016 Location: All Over!
Posts: 290
Thanked: 536 Times
| ![]() Guys, This is another major category where Corporate executives are rushing in their droves to foreclose existing car leases fearing a substantial increase in monthly payments once the goods and services tax (GST) is in place on July 1 due to the absence of any transition mechanism. Major Cost impacts - 1. No transition credit for vehicles leased pre-GST 2. Cost of lease to go up by 30% due to GST and VAT difference 3. Industry demands for credit on excise duty paid The Leasing companies are flooded with requests to foreclose the Car leasing contracts and have moved to either loans or purchased the cars outright. Link - http://economictimes.indiatimes.com/...w/59315191.cms PS: Mods, please merge this thread if found similar to any other Cheers, Amey |
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![]() | #13 |
Distinguished - BHPian ![]() ![]() | ![]() But looks like the cut-off for the fore-closure was 30-June, before the GST came into effect. They can still do it now, but the fore-closure amount will also be higher now. If they dont fore-close, they need to pay higher amount each month. ( A colleague is having to pay 3k more a month, for a Baleno ! ) |
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![]() | #14 | |
BHPian ![]() Join Date: Jul 2016 Location: All Over!
Posts: 290
Thanked: 536 Times
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Basically the Residual value plays an important role in the lease working and has the maximum effect on the 30% cost difference. Anything old lease foreclosed after 30th June' 2017 will have a cost impact. Cheers, Amey | |
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![]() | #15 | |
Senior - BHPian ![]() Join Date: Jan 2014 Location: Bangalore
Posts: 1,452
Thanked: 2,978 Times
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It is still a wait and watch as of now but as per rules the Lease companies have to legally starting applying GST from July itself. | |
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