BHPian ghtg1 recently shared this with other enthusiasts: I am a CA and also have studied law. I have had my Scorpio N on car lease since July 2023 on an operating dry lease. A week back, I received an email from my lease company that my lease rent has increased due to the government removing cess and since they cannot claim cess input credit, they have passed on that cost to me. What those thugs (I am putting it mildly – SMAS is the name of my lessor) did was that they added cess recovery in lease rental and charged 40% GST on it. This increased my monthly rental by 10% or so instead of reducing it. I went through my lease agreement for the first time and noticed there is no clause in the contract where they can pass on the loss due to the abolition of the input cess credit. These thugs did a contract where any increase in taxes will be passed on to me, but didn’t mention anything about passing any reduction in taxes to me or anything about cessation of cess credit. So legally, they are not supposed to recover a dime from me, and since they cannot collect the cess legally, they should reduce my lease rental. I did had a meeting with them today and they were not able to point a single point in contract where they can pass on the cess cost to me yet they vaguely argued that since it has increased our cost we are passing it to you, you can check with other companies they have also done the same, our intention at time of entering contract was different etc etc (I have a video recorded by my note taker of this nonsense arguments). They have reduced lease rentals for smaller cars even though the contract has no provision for it, but for a simple reason that it will trigger anti profiteering rules by the government, and they would be in trouble. With cess, there is no such provision and hence even when the contract does not allow it, they want to push buttons and pocket illegal gains. This is completely a commercial transaction, and everyone should review their contracts – if there is no provision for it, we should firmly push back. These guys have to fight with the government for cess credit, but they don’t have the guts to do that and pass on the cost to customers, breaching the contract. I am planning to go all in and would probably incur more cost than what I will save, but I am in no mood to let this slide. Here’s to this community, and will keep you all posted. Wish me luck. Check out BHPian comments for more insights and information.
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GST 2.0 impacts my Scorpio N lease agreement: Here's how
