Car Leasing: GST and Interest cost
This query is : Resolved
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.
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.
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
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Difference between Date of Payment and Date of Deduction?
- Tax Audit Applicability – Newly Formed Partnership Firm with Profit Below 6%/8%
- TDS CREDIT MISMATCHING
- Buy back of shares u/s69
- GST Rate for Catering Services
- ADDITION OF CHALLAN IN TDS RETURN FORM 140
- Journal entry of busniess expenses
- TDS AND ITR ISSUE
- Same demand raised for original as well as rectification request return
- Sale of property held jointly with a non resident Indian
- FCRA 6 E- Intimation
- CALCULATION OF DEFFERED TAX - OP BL IS DTL & CURRET IT DTA
- LLP audit under companies act
- Experienced CA recommendation from Kolkata for FNO return filing
- Interest Reporting in Form 168
- Sales of goods of amount Rs77 lakhs to a party
- Tax Demand of ₹4,650 for AY 2026-27
- Concept of Vendor and customner reconciliation
- Mistake in e-invoice identified after 24 hours
- EXPORT PAYMENT
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
