New Delhi: The Goods and Services Tax (GST) Council on Saturday decided to have a single definition across all states in the country for sports utility vehicles, attracting a higher tax rate.
The GST Council on Saturday clarified on the definition of SUVs (sports utility vehicles) for levy of 22% compensation cess and decided to come out with parameters to define MUVs (multi utility vehicles).
Currently, cars with engine capacity exceeding 1500 cc, length exceeding 4000 mm and having ground clearance of 170 mm attract a GST of 28% and a 22% cess, taking the effective tax rate to 50%. However, states do not have a consistent definition define a vehicle as a SUV, leading to confusion.
Therefore, clarification was given at the council meeting that the higher rate of compensation cess of 22 per cent is applicable to a motor vehicle fulfilling all four conditions:
- It is popularly known as SUV
- Has engine capacity exceeding 1,500cc
- Length exceeding 4,000 mm
- Has ground clearance of 170 mm and above
“So this clarification is not new tax, it’s more to say what defines that commodity which is under taxation as SUV,” the minister added.
Key Decisions Taken In GST Council Meet
- No tax increase on any item was decided at the GST Council meeting on Saturday. Meanwhile, the Council recommended reducing GST on biofuel from 18 per cent to 5 per cent.
- Besides, the Council also recommended reduction of GST on Ethyl alcohol or biofuel supplied to refineries for blending with motor spirit (petrol) to five per cent from current 18 per cent.
- The GST Council recommended decriminalising three kinds of offences –“obstruction or preventing any officer in the discharge of his duties; deliberate tempering of material evidence; and failure to supply the information.”
- “Obstructing any officer from discharging his duties, threshold limit of tax amount for launching prosecution in any criminal offence under GST laws raised from Rs 1 crore to Rs 2 crore for all offences except fake invoices,” the revenue secretary stated.
- Tax rate on husk of pulses reduced to nil from 5 per cent, the revenue secretary said.
Comments are closed.