Government raises tax on SUVs, MUVs, and other UVs in India making it more Expensive

New Delhi :

In a recent GST Council meeting, the Union Finance Minister, Nirmala Sitharaman, approved a proposal to increase the compensation cess on Multi-Purpose Cars (MUVs) from 20% to 22%.

This decision by the central government is expected to lead to a hike in prices for big vehicles across the country.

Segment includes popular models like Maruti Suzuki Invicto, Toyota Innova, Maruti Ertiga, and Kia Carens.

Impact on Pricing:

With this new decision, customers looking to purchase SUVs, MUVs, or XUVs will have to bear the additional burden.

The additional 2% compensation cess on top of the existing 20%.

The increased prices will be applicable to vehicles with a length exceeding 4 meters, engine capacity over 1500 cc, and ground clearance above 170 mm.

Sedans are exempted

It is important to note that sedan cars have been exempted from this increased cess, which will remain at 20%.

Implementation Date

The decision to impose the increased compensation cess was made during the 50th meeting of the GST Council, headed by Finance Minister Nirmala Sitharaman.

The Fitment Committee of the GST Council had recommended the 22% cess on all types of multi-utility vehicles, including SUVs and XUVs.

These changes will come into effect after an amendment in the GST law.

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