There’s a similar confusion regarding the definition of a Multi Utility Vehicle (MUV).

The Goods and Services Tax (GST) Council has decided to adopt a single definition across all states for sports utility vehicles (SUVs) that attract a higher tax rate.

According to the GST Council, a vehicle with an engine capacity greater than 1,500cc, that’s longer than 4,000 mm and has a ground clearance greater than 170 mm will attract a GST of 28% and a 22% cess. That’s an effective tax rate of 50%.

The issue arose when states did not adopt a consistent definition, which led to confusion among automakers. There’s a similar confusion regarding the definition of a Multi Utility Vehicle (MUV).

The higher rate of compensation cess is payable to a vehicle that meets all the parameters mentioned above. That being said, a committee will decide whether MUVs must also be taxed at a higher rate.

Source: ET Auto

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