The Goods and Services Tax (GST) Council resolved on Saturday to establish a unified definition for sports utility vehicles throughout all states in the nation, attracting a higher tax rate.

Currently, vehicles with an engine capacity greater than 1500 cc, a length greater than 4000 mm, and a ground clearance greater than 170 mm are subject to a GST of 28% and a cess of 22%, bringing the overall tax rate to 50%. However, states do not consistently define what constitutes an SUV, which causes confusion among automakers. The council, which was made up of state finance ministers and presided over by the union finance minister, concluded that in order for a vehicle to be classed as an SUV, it must satisfy all requirements, including those for engine size, length, and ground clearance. Vivek Johri, Chairman of the Central Board of Indirect Taxes and Customs, according to NDTV, stated, "If cars do not meet any of these criteria, a lower cess rate will be applicable."

Key Points

• The Goods and Services Tax (GST) Council resolved on Saturday to establish a unified definition for sports utility vehicles throughout all states in the nation, attracting a higher tax rate.

• The council, which was made up of state finance ministers and presided over by the union finance minister, concluded that in order for a vehicle to be classed as an SUV, it must satisfy all requirements, including those for engine size, length, and ground clearance

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