GST Council decided to have a single definition across all states in India for SUVs
States don't have a consistent definition of SUV, leading to confusion among automakers
SUVs currently draw the highest rate of tax under GST regime, at 28%
A vehicle must meet all the criteria including engine capacity, length and ground clearance to be classified as a SUV
Cars with engines exceeding 1500 cc, length exceeding 4,000 mm and 170 mm of ground clearance attract 28% GST and 22% cess, taking the effective tax rate to 50%
GST Council has stated if the cars do not meet any of these previously mentioned criteria, they won't be considered as SUVs
The cars not meeting the criteria for being defined as SUV will draw lower cess rate
GST Council will also consider whether mobility utility vehicles will also have to meet these criteria to come under the higher cess threshold
Despite being slapped with the highest rate of cess under GST regime, SUVs are experiencing increasingly higher demand