Expect To Pay More For Big SUVs And MPVs Soon With Increase In Cess

MPVs will get more expensive overall when put together in the higher cess bracket.

MPVs will get more expensive overall when put together in the higher cess bracket.

Source : Somnath Chatterjee

New Delhi: Confusion regarding SUVs or other types of cars in relation to 22 percent cess or 20 percent cess has been done away with. Now, all UVs whether be it any body type including SUVs are clubbed under the 22 percent cess category.

 

This means SUVs and MUVs will fall under the same bracket but will also mean some SUVs having 20 percent cess will not cost more being put under the 22 percent cess category. SUV, MPV, MUV, etc does not matter but the basic parameters include a vehicle length of more than 4,000mm, unladen ground clearance of more than 170mm plus an engine displacement of more than 1.5 litres.

 

These cars will now attract a 22 percent compensation cess over and above 28 percent GST. Earlier, only certain vehicles known as Sport Utility Vehicles attracted the 22 percent cess. Sedans though will not come under the higher cess as clarified.

 

However, hybrid cars like the Hycross will still attract a lower rate of 15 percent cess. That said, MPVs will get more expensive overall when put together in the higher cess bracket. Hence, some SUVs would also see an increase in prices as their unladen ground clearance meets the criteria.

As per definition, then compact SUVs will not fit under this category with lower engine sizes while bigger SUVs and MPVs will fit in. This also means the definition of an SUV is now clearer along with the ground clearance of a car-laden or unladen.

 

Hence, popular cars like from Maruti or from Hyundai will not have any price increase but bigger models like the Tucson will get a possible hike along with SUVs like the Mahindra Scorpio N or the Tata Safari.