The GST hike on SUVs may have a negligible effect on overall sales. Industry observers say demand for MPVs makes up for less than 12% of auto sales and that could be the reason for the effect being very limited on the auto sector.
The GST council in its 50th meeting decided to revise the tax structure for various industries. This included redefining the Sports Utility Vehicle (SUV) segment and levying an additional 2% cess, which now takes up the total cess to 22% from the existing 20%. The levy is in addition to the 28% GST rate for vehicles sold in India
The GST council has included all Utility Vehicles— SUV, MUV, MPV, and so on. It defines all vehicles that measure more than 4000mm in length, have an engine displacement of more than 1.5 litres, and with a ground clearance of 170mm or more will attract a 22% compensation cess over and above 28% GST. This move once implemented will make the select SUVs, one of the highest taxed products in the country at 50% (22% cess + 28% GST).
Read more at : Financial Express
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