Vehicles with an engine over 1500 cc, a length over 4000 mm, and a ground clearance over 170 mm are subject to a 22% cess and a 28% GST.
New Delhi: The GST Council resolved on Saturday to have a unified definition for sports utility vehicles across all states, attracting a higher tax rate.
Vehicles with an engine capacity greater than 1500 cc, a length greater than 4000 mm, and a ground clearance greater than 170 mm are subject to a GST of 28% and a cess of 22%, bringing the overall tax rate to 50%. However, states do not consistently define what constitutes an SUV, which confuses automakers.
The council, made up of state finance ministers and presided over by the union finance minister, concluded that for a vehicle to be classed as an SUV, it must satisfy all requirements, including those for engine size, length, and ground clearance.
“If cars do not meet any of these criteria, lower cess rate will be applicable,” the Central Board of Indirect Taxes and Customs’ Vivek Johri stated.
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According to Johri, an internal committee will also decide if mobility utility vehicles should adhere to these standards to fall under the higher cess level.
The body did not discuss the ministerial panel’s report on the taxation of online gambling enterprises and casinos, which has implications for billion-dollar businesses like Tiger Global-backed Dream11 and Sequoia Capital-backed Mobile Premier League.
