The word chattel implies vehicle and the term chattel mortgage in its true sense implies that you will be taking out a mortgage on the purchased vehicle while being able to use the vehicle and enjoy tax benefits at the same time. This financial product offers businesses the opportunity to get full input tax credit from GST incurred expenses. This tax credit is given immediately to those businesses that operate under a cash accounting basis.
The loan structures for such agreements can be tailored to meet individual needs. In this type of financial agreement, the vehicle that you have purchased will automatically become yours, provided that the terms of the agreement are met and that you have paid the lender in full.
Usually the title of ownership is only given to the buyer after he has paid the last repayment to the lender along with the residual payment if any. It should be noted that while GST does not apply to vehicle mortgages on the monthly payment, the GST on the purchase is recoverable at the time of the said purchase.