[Turbanator]

There is a special finance buyback option for Mini EV customers. If you are a business owner or practice something and claim depreciation, you can get a new Mini EV at a monthly net outflow of less than Rs 30,000

This scheme comes with 100% funding and is valid for only 12 months of finance. Below are details for Chandigarh/ Punjab. These will be the same for any other RTO where EV's have Zero road tax. This may not be attractive in other places where RTO is high, given the low period.

[GTO]

That is an incredible deal, Turbanator. Thanks for sharing! Moving your post to a new thread.

Also linking to your post about the deal on the BMW iX.

[buzzy_boy]

This is an awesome deal.


With EVs having a limited shelf life (determined by the life of the battery), I expect more such deals with ~3 year tenure.

[Tutenkhamen]

Basically renting an Ev Mini at 30k₹ / month.
Idk, the deal looks alright but I’hd rather ‘just rent’ a car of my choice (!Ev but thats another matter) even if the rent comes out to 40-50k. Don’t have to involve in down payment outflow + registration + tax rebate + Giving Mini back.

[shyampsunder]

Originally Posted by buzzy_boy

This is an awesome deal.


With EVs having a limited shelf life (determined by the life of the battery), I expect more such deals with ~3 year tenure.

We have decade old Tesla’s running on batteries which are two generations old at this point without any problems with minimal range degradation. So don't know where this limited shelf life is coming from.

Also if the car has a limited shelf life, how will such lucrative deals be possible? Why will the company bear the brunt of depreciation?

[BhayanaV]

Originally Posted by Turbanator

There is a special finance buyback option for Mini EV customers. If you are a business owner or practice something and claim depreciation, you can get a new Mini EV at a monthly net outflow of less than Rs 30,000.

What after 12 months, return the car at assured buy back value?

[rav1up]

Can you clarify one thing here:

If you are taking monthly payments as tax deductible, then it should be a lease and not finance.

And if it's a lease, you cannot claim depreciation on full value of the vehicle.

So shouldn't it be either of the two and not both?

Looks like there is double dipping portrayed here to show artificially low cost of ownership.

[Jeroen]

Apart from the financial aspect, the Mini EV is a seriously interesting car that stands out from the crowd.
I happened to be at my local BMW Mini dealer the other day and I had a quick drive in one of these. It might be a bit heavier than my petrol Mini One, but it still corners like a proper Mini.

Jeroen

[aashishnb]

Can you please share the excel. Could not understand the math.

[Turbanator]

Originally Posted by rav1up

If you are taking monthly payments as tax deductible, then it should be a lease and not finance.

Per prevailing laws, this is considered a Purchase under EMI as per any other Bank Loan. What is different is that a buyback value is fixed with BMW under this agreement, so technically, though we are paying interest on the total amount, we don't have to pay the principal amount as in other loans. These are essentially interest-only loans.

One can claim 40% depreciation on the vehicle as per EV slab and the interest portion as an expense, again as per any normal car purchase.

However, I am not sure of the liability of GST at the end of the contract. Per SA, there is nil, but I am not 100% convinced as, technically, if a car's depreciated value is lower than the selling price (buyback price), then 18% GST will be applicable per used car. This 18% rate is also questionable as the new EV attracts 5% GST, whereas in the older cars, there is no such distinction, or at least I am not aware. But the dealership is pretty confident.

Looks like there is double dipping portrayed here to show artificially low cost of ownership.

Please check after going through my remarks and share your concerns.

Originally Posted by aashishnb

Can you please share the excel. Could not understand the math.

I got this from the dealer, but you can punch the numbers and see if there is anything wrong.

[Everlearner]

Originally Posted by Turbanator

One can claim 40% depreciation on the vehicle as per EV slab and the interest portion as an expense, again as per any normal car purchase.

If it's a lease, entire EMI amount can be claimed as an expense, but if its a loan, only the interest portion can be claimed as expense along with depreciation benefits. Is this correct?

[Bhargav7]

I modified the calculation a little bit -

1. The TCS paid is not a cost. We can get this as a refund when we file the tax returns.

2. Depreciation - We will not get the full benefit here. While we can claim the 40% depreciation for the EV, the difference between the depreciated value and the buyback value at the end of one year will be taxed as Short term capital gain. The only way to avoid capital gains is to buy another EV before the end of the year. Even in that case, the depreciation claimed on the new EV will be reduced to a certain extent.

Considering this, the revised calculation is -


Capital gains are computed on asset cost - Depreciation - buyback value.

Originally Posted by rav1up

If you are taking monthly payments as tax deductible, then it should be a lease and not finance.

This is considered a loan and hence both the interest and depreciation can be claimed as a deduction. The EMIs in this case cover only the interest. Principal, even if any is paid, would be a bare minimum.

[Turbanator]

Originally Posted by Bhargav7

1. The TCS paid is not a cost. We can get this as a refund when we file the tax returns.

Correct. It should not be added.

2. Depreciation - While we can claim the 40% depreciation for the EV, the difference between the depreciated value and the buyback value at the end of one year will be taxed as Short term capital gain. The only way to avoid capital gains is to buy another EV before the end of the year. Even in that case, the depreciation claimed on the new EV will be reduced to a certain extent.

That's a very good point Am sure, BMW or the dealer will counter as you have mentioned, buy another car, BMW and EV, preferably


What's your take on the GST, is my understanding correct?

[rav1up]

I'd think the buy back amount includes GST portion as well.

That said, there is likely 18% of 1.15L (insurance), 18% of 25k (accessories) and 5% of discounted ex showroom price that will be available as input tax credit. That is another approx 2.7L available as cost savings. So monthly cost would be approx 40k/month.

For a business owner whose tax liability exceeds 7.5L to 8L, this is a great approach to enjoy a fun vehicle for an entire year. It's just that the cash flow that would have gone to govt, is redirected to BMW in return.

[Turbanator]

Originally Posted by rav1up

I'd think the buy back amount includes GST portion as well.

GST is the seller's liability, so I am unsure about this.

That said, there is likely 18% of 1.15L (insurance), 18% of 25k (accessories) and 5% of discounted ex showroom price that will be available as input tax credit.

One cannot claim GST on Insurance, Motor cars or accessories/repairs.

https://www.team-bhp.com/forum/india...ce-repair.html (GST: No more input tax credit on automotive invoices (purchase, insurance, service, repair))

It's just that the cash flow that would have gone to govt, is redirected to BMW in return.

Nope, remember there is 100% customs duty, so they have already got a lot in the form of taxes