The GST council met for its 50th meeting on Tuesday and decided to bring all Utility Vehicles (UVs) under the 22 percent cess bracket, an increase of 2 percent, doing away with the differential rate of compensation cess. The decision means that Sport Utility Vehicles (SUVs) and Multi Utility Vehicles (MUVs) will fall under the new tax bracket.
The council has decided to include all Utility Vehicles, no matter what they are called — SUV, MUV, MPV, and so on. The council has said that no matter what the vehicle is called, as long it meets set parameters, it will attract a 22 percent compensation cess, over and above 28 percent GST.
The Union finance minister Nirmala Sitharaman said presently the definition of an SUV for levy of cess includes four parameters — should be popularly known as SUV, should be of length of 4 meters or above and engine capacity of 1,500 cc and above, and unladed ground clearance of minimum 170 mm.
Now, the SUV definition will include only the length (4 meters and above), engine capacity (1,500 cc and more), and ground clearance (unladed clearance of 170 mm and more), she said.
Sedans will not come under the purview of higher cess, Finance Minister Nirmala Sitharaman clarified during the press conference.