Government has given definition of SUV, now buyers will have to pay this much tax?

Sports Utility Vehicles

New Delhi: In its 48th meeting, the GST Council also clarified the definition of SUV ie Sports Utility Vehicles, and decided to impose a 22 percent compensation cess on these vehicles. The Council also decided to frame criteria to define MUV (Multi Utility Vehicle).

In the meeting, Finance Minister Nirmala Sitharaman said that the discussion on MUVs started when some states asked whether sedans should be included in the SUV category. The states had also suggested bringing the definition of MUV.

Now this will be the identity of the SUV
The finance minister said that in respect of SUVs, a clarification has been made that the higher rate of compensation cess of 22 percent is applicable to motor vehicles fulfilling all four conditions, which are colloquially referred to as SUVs. These include an engine capacity of more than 1,500 cc, a length of more than 4,000 mm, and a ground clearance of 170 mm or more. He said, “This clarification is not a new tax. Through this, the tax that applies only to the SUV category has been defined.

Sports Utility Vehicles

Such cars will attract a 22 percent cess along with a 28 percent GST
On the other hand, the vehicle industry body SIAM welcomed the GST Council’s clarification on the definition of SUV and said that it is in line with the discussions held with the Finance Ministry. Reacting to this decision of the GST Council, the Indian Vehicle Manufacturers Association (SIAM) said that it is now clear that in addition to 28 percent GST, the higher rate of 22 percent cess will be applicable only to those vehicles which fulfill all four conditions.

Industry expressed gratitude
In its statement, SIAM also thanked the Ministry of Finance, the Government of India, and the GST Council for issuing clarifications on the definition of SUV. He said that this decision of the GST Council is in line with the discussion held with the Finance Ministry.