Car Leasing: GST and Interest cost

This query is : Resolved

Ashish Kothari (Querist)
Follow

07 January 2021 An Employee (Ee) avails a company leased car from Employer (Er) through its appointed car leasing company (Clc). Clc leases the car for 4 years with a residual value of 20%. Clc claims input tax credit on the total purchase price P of a car, where the total purchase price P = (Ex-showroom+Regn+Other charges = B) + GST. Clc leases the car at a monthly lease of X = Principal (P) + Interest (I) + GST on lease as applicable.

The question is: Whether I is calculated on P or B at start of the term? Since ITC is claimed on P, then B is the value of the leased car, hence it seems logical that I should be calculated on B. Please clarify the rationale either way.

Lekhraj sood

Lekhraj sood (Expert)
Follow

07 January 2021 It depends on the policy of the leasing company. They may finance the on road price or ex-showroom price. Interest is calculated on the value financed - it can be P or B as agreed .

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

Summarize this with AI

ChatGPT Perplexity Claude Google AI Grok

Similar Resolved Queries

Unanswered Queries

Popular
Recent

Trending Online Classes

Direct Tax Laws & International Taxation May 26,Sept 26 & Jan 27

CA Arvind Tuli

Enroll Now
Audit Fast Track Recorded Batch For May 26,Sept 26 & Jan 27

CA Aarti Lahoti

Enroll Now
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English

CA Bhanwar Borana & CA Shubham Keswani

Enroll Now

view all classess

Meet our CAclubindia PRO Members

ASHOK B GONDKAR

Nithish Kothari

Ashish Agrawal

BABUSHANKAR BASAPPA

Nilesh Manek

Subscribe Now

Car Leasing: GST and Interest cost

Similar Resolved Queries

Trending Online Classes

Meet our CAclubindia PRO Members

Quick Links

Browse by Category

Latest Job Openings

Article Assistant

Accountant

GST CONSULTANT

GST CONSULTANCY

Manager- Finance and Compliance

CA Final