The 50th Goods and Services Tax (GST) Council on Tuesday, July 11, clarified that all multi-utility vehicles (MUVs), whether it's sports utility vehicles (SUVs) or crossover utility vehicles (XUVs), will have to pay a tax of 22 percent compensation cess over and above the 28 percent GST rate.

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.

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Earlier, the Fitment Committee, comprising tax officials from the Centre and states, recommended to the GST Council to define MUVs and XUVs at par with the sports utility vehicles for the purpose of GST.

The committee has recommended that all utility vehicles, by whatever name called, would attract 22 percent cess provided they meet three parameters — length greater than 4 metre, engine capacity greater than 1500 cc, and ground clearance more than 170 mm.

(Edited by : Shoma Bhattacharjee)

First Published:Jul 11, 2023 9:06 PM IST