[84.monsoon]

It is clear that no auto enthusiast or even auto-industry followers were included in this GST Council meeting. It seems like some bureaucrats who have no awareness of the technical underpinnings and characteristics of the cars got together and wrote a classic 20th century Raj Era type rule that on the surface seems to provide clarity, however, creates tons of confusion once you dig deeper. Yeah, this is the fallacy of our educational system, where, by just writing points 1, 2 and 3 it is perceived to make everything clear, regardless of what is the true rational and logical position behind the points. Exceptions and what-ifs, are never thought through or clarified, and the bureaucrats do not look beyond the obvious.

Tons of questions go unanswered in this ruling - e.g. what does popularly known as SUV mean? Is the ground clearance, laden or unladen? How about hybrid and electric vehicles etc.

If only Prime Minister Modi brings a rule that all government departments and councils, whenever making new rules, should also write a detailed FAQ document. By just having someone think through the questions that might rise due to the inherent ambiguity of the rule or guideline, it’s possible to identify the exceptional scenarios and the lack of clarity, upfront and address it - versus leaving it hanging out in the open for industry and consumers to try to interpret and get it wrong when compared to what was on the “council’s mind“ when they wrote the rule. Only to then require clarification after clarification to be issued by the government department wasting everyone’s time. But of course this would require these highnesses to have an inkling of doubt that what they pronounce might not be clear to the masses, which their egos would never allow even a fleeting admission of.

[clevermax]

Originally Posted by echo77

Looks like ALL four of the criteria need to be true:
1. it is popularly known as SUV
2. has engine capacity exceeding 1500 cc
3. length exceeding 4000 mm
4. ground clearance of 170 mm or above

I am just sad that my sedan missed the SUV status by just 5 millimeters of ground clearance. All other criteria check out.

Engine capacity of more than 1500cc - check
Length more than 4m - check
Ground clearance of at least 170mm - It is only 165mm.

Why do we still follow the cubic-capacity-based slabs for everything? Why can't it be based on engine power and vehicle weight? There are 1-liter and 1.2-liter turbocharged vehicles that produce more power than a 1600cc NA engine nowadays.

[Nithesh_M]

Originally Posted by 84.monsoon

It .

If only Prime Minister Modi brings a rule that all government departments and councils, whenever making new rules, should also write a detailed FAQ document.

Or you know let all ministers in charge of policy making give public press conference first so they can take live questions from crowd and not pre screened, teleprompter or scripted queries from handpicked actors. We will really know how much of the policy that's been drafted is in the minister's head.

But then most of the ministers top to bottom don't even know the A+B of the policies drafted by the authorities under them. They will probably ask for an extra 2AB in the draft khichdi policy.

This highlights the issue of public thinking the ministers make policies when in reality its the concerned IAS officers pulling the strings and ministers take credit when it goes right but transfers same officer if dumb suggestions from ministry are ignored. (speaking from personal experience).

[fhdowntheline]

"Popularly" called SUV is such a nebulous criterion. The alternative is simple, dont call it an SUV !! Truth be told, Creta, Seltos and even the Harrier are not SUVs by classical standards. This discussion is simply pointing out to the futility of such bureaucratic exercises. Just keep one single rate for a specific type of transmission, and give better benefits to strong hybrid transmissions. That will solve all sorts of headaches for everybody.

[VeluM]

There is a fairly illogical tax structure in place as is, I’m glad there will be clarity on the governments definition of an SUV at the least.

Bringing up used cars in a discussion about new vehicle taxation is disingenuous. Unnecessary sarcasm about a separate tax slab for each variant is a waste of space in this discussion IMHO.

Manufacturers need clear definitions, government is making one, manufacturers will react accordingly - Once the new rules come into play.

We’ve been cribbing about high taxes on the middle class - along with TDS that makes avoidance impossible. If people are able to claim GST reimbursement or whatever on the resale of a used car, that is ridiculous in my opinion. I think I such a loophole must be plugged.

[achyutaghosh]

Originally Posted by TSIched'Out

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.

Not in favour of these subjective rates such as size, engine capacity, ground clearance etc.
Think rates should be based on key objective criteria that really matter when it comes to sustainability, and where there are no debates on, such as-

1. Fuel efficiency
2. Emissions

[Motorhead23]

I don't understand why government cannot consult automotive experts, people at SIAM while drafting such policies ? Even the current policy has multiple flaws for example Maruti Brezza has total GST + Cess @ ~45% whereas Hyundai Venue GST + Cess @ ~31%. Now here both the cars are Compact Sub 4M SUV with Brezza being less powerful too, still a higher GST is levied owing to engine size . For that matter Mahindra Thar is also a Sub 4M SUV with GST + Cess @ ~45%.

In my view, GST + Cess % should depend upon the Footprint of vehicle, CO2 Emission/Km, Power / Weight Ratio , other emission friendly technology [Hybrid, Mild-Hybrid, Alternate Fuel etc] .

And MoRTH is already considering the above parameters for compliance CAFE Stage 2 for penalizing manufactures then why cannot we have GST standards like that ?

[volkman10]

Views from the largest car manufacturer on taxation of cars:

[d-g-p]

These guidelines should have instead be defining what could not be called as an SUV without exception, if
1) length is below 4 meters.
2) Engine capacity is below 1.5 liters for NA ( approx 1.2 for turbo).
3) Ground clearance below 170-175 mm. (preferably 175 mm)

Moving on, they could have defined what can be called as an true SUV. As a rough guideline, arbitarily say :
1) Engine capacity of 2.0 liters and above (1.5 and above turbo)
2) Length more than 4.3 meters
3) Ground clearance more than 180 - 185 mm
4) 4x4 or AWD (at least in few variants if not all)

Lastly an intermediate variant (call it mini, micro, pseudo or whatever SUV) with in between taxation amount.

We should not be dictating too much on manufacturer for what they want to manufacture. A very rigid rules makes it very difficult to bring in Global products. As an example, a car with either 4.2 meters /1.3 turbo engine / 178mm unladen ground clearance would be in intermediate tax bracket. Even this type of classification may not be perfect. Additional criteria like Price of the car, type of engine - diesel vs petrol vs Hybrid vs Electric, true SUV capabilities may be considered.

[Highflyer]

All the conditions have to be met exactly as given in the new definition. Nothing more nothing less. 1499.99 cc engined vehicle wouldn’t be an SUV.
If a certain model meets other SUV criteria but has multiple engine options, then the ones with an engine capacity of 1500 cc or more would be taxed at SUV rates and others at lower rate.

No ifs and buts.

[Kosfactor]

Originally Posted by Motorhead23

In my view, GST + Cess % should depend upon the Footprint of vehicle, CO2 Emission/Km, Power / Weight Ratio , other emission friendly technology [Hybrid, Mild-Hybrid, Alternate Fuel etc] .

If you look at the Grand Vitara mild Vs full hybrid - I doubt if the additional CO2 emissions that goes into the extra hardware will ever be of any benefit to the environment. I do not think even the cost will be recovered if we are to go by the ARAI FE numbers.

This is probably the reason why India never really favored Hybrids to begin with.

[Hawk4]

Govt wants international manufactures to setup their plant here and sell here. But still follow laws, rules framed when Maruti 800 was launched. They need to be upto date if we want to be competitive.

For our infrastructure they cant reduce the taxes to 5-10% like USA, in which case all roads will be flooded with cars. So they need to at least update the taxation rules and get rid of silly rules like 4meter length, GC etc. Instead should come up with tax slabs based on price of the vehicle. Also more stricter laws to protect consumers rights like western countries.

[jetsetgo08]

Could someone summarize on which cars would have the benefit of the new GST rule?

[volkman10]

Originally Posted by jetsetgo08

Could someone summarize on which cars would have the benefit of the new GST rule?

GST Council confirms SUV tax rates to remain unchanged.

As per the GST new clarification, a car would be considered an SUV only if it fully meets four criteria.

While the clarification comes based on the recommendations put in by the Society of Indian Automobile Manufacturers (SIAM) in its discussions with the Ministry of Finance, it will have no impact on the prices of SUVs for end consumers.

According to a SIAM spokesperson, it is business as usual and this clarification is only to clear the air on the SUV body style’s definition. The lack of uniformity among the states in India was causing concern for several manufacturers with regard to GST payments on some of their models.

Link

[Maky]

I am more curious in knowing when are they going to remove the ‘Cess’ which was put in place to help states during the GST ‘transition’ period and was supposed to be withdrawn in 2022.