Toyota Innova Crysta, VW Tiguan, Hyundai Tucson Set For Price Hike As MPVs, Crossovers To Attract 22% Cess
By Amaan Ahmed
1 mins read
Published on July 12, 2023
- GST council has recommended rationalisation of compensation cess for all types of utility vehicles.
- Previously, only models ‘popularly known as Sports Utility Vehicles’ attracted 22 per cent cess.
- This move is likely to lead to a price hike in the range of Rs 40,000 to Rs 80,000 for a number of popular utility vehicles.
The 50th meeting of the Goods and Services Tax (GST) council brought some unwelcome news for potential utility vehicle (UV) buyers. As per the council’s latest recommendations, all utility vehicles – regardless of their body style – will now attract a rationalised rate of compensation cess, pegged at 22 per cent. Previously, vehicles that attracted 22 per cent cess had to meet four parameters – to exceed four metres in length, 1,500 cc in engine displacement and 170 mm of ground clearance, and also be ‘popularly known as Sports Utility Vehicles (SUV)’. The council has now eliminated the last of those parameters to bring all kinds of UVs, including multi-purpose vehicles (MPVs) and crossovers under the same cess bracket.
“It has been decided to amend the entry 52B in compensation cess notification to include all utility vehicles by whatever name called provided they meet the parameters of length exceeding 4,000 mm, engine capacity exceeding 1,500 cc and having Ground Clearance of 170 mm & above and to clarify by way of explanation that ‘ground clearance’ means ground clearance in unladen condition,” reads the official statement from the council.
Even models such as the diesel-powered MG Hector and Hector Plus are likely to witness a price hike with an increase in cess.
In a press conference following the meeting, Finance Minister Nirmala Sitharaman explained that while erasing the ‘popularly known as Sports Utility Vehicles’ requirement from the GST rate classification would also have brought sedans under the higher cess bracket, this was opposed by two states – Punjab and Tamil Nadu – after which the council decided to expressly exempt sedans from the higher cess bracket.
A variety of MPVs and crossovers, which so far attracted 20 per cent compensation cess, are now facing an impending rise in price. carandbike understands that this rationalisation will spell a price hike for some popular models, including the likes of the Toyota Innova Crysta, Innova Hycross petrol, Volkswagen Tiguan and the Hyundai Tucson. Models such as the MG Hector and Hector Plus diesel, too, are likely to be affected by this move. The increase in price is expected to be anywhere between Rs 40,000 to Rs 80,000, depending on the vehicle. Most carmakers are in the process of analysing the announcement, and are likely to increase prices in the coming weeks.
“We have taken note of the announcement made during yesterday’s GST Council meeting about amendment in compensation cess for utility vehicles. We will wait for the notification to understand the details before assessing the impact. At this point we would like to refrain from commenting further”, said Swapnesh Maru, Executive Vice President and Chief Compliance Officer at Toyota Kirloskar Motor.
Last Updated on July 12, 2023
Great Deals on Used CarsView All Used Cars
- 8,000 km
- 88,000 km
- 72,000 km
- 53,763 km
- 24,110 km
- 20,156 km
- 64,000 km
- 65,000 km
- 85,000 km
- 70,123 km
-3969 second ago
The new video shows the subcompact SUV’s redesigned tail section and confirms that it will get ADAS functions
-1199 second ago
The Mercedes-AMG CLE 53 4MATIC+ Coupe has an upgraded 3.0-litre inline six-cylinder turbo engine producing 442 bhp and 560 Nm torque.
1 hour ago
The Swift will be powered by a 1.2 litre, 3-cylinder petrol engine that puts out 81 bhp and 108 Nm of torque
2 hours ago
The Revuelto is powered by a 6.5 litre V12 engine mated to three electric motors that churn out a combined 1001 bhp
3 hours ago
Kia India takes the wraps off its new EV charging initiative, the K-Charge. It will be available to non-Kia EV owners as well.
3 hours ago
Milestone was reached about 7 years after the plant commenced operations in February 2017.
3 hours ago
Hero MotoCorp and Ather Energy come together to form a partnership for an inter-operable fast-charging network in India.
4 hours ago
Kawasaki is offering discount vouchers on the Vulcan S, Ninja 400, Ninja 650 and Versys 650 in its lineup with benefits going up to Rs. 60,000
4 hours ago
India-spec compact SUV to get a different design from the model sold in global markets.
5 hours ago
FADA reports that retail sales for automobiles in India were at an all-time high, with 28.54 lakh vehicles sold, surpassing 25.69 lakh vehicles sold in March 2020, when the industry transitioned from BS4 to BS6.
2 days ago
Images of the next-generation Hyundai i20 have recently surfaced online, and this time around a couple of prototypes of the car have been spotted testing in India. Unlike the previously seen spy photos of the new-gen Hyundai i20, which features alloy wheels, the cars in these latest images are running on steel wheels with hub caps, but we do get a much closer look at the front section of the car.
5 days ago
The brand has witnessed a dip in sales of 18 per cent when compared to sales from the previous month.
5 days ago
New tech moves the EV's reduction gear into the wheel hub allowing for more compact electric motors and greater space efficiency
5 days ago
SAIC President Wang Xiaoqiu and JSW Group’s Parth Jindal signed the shareholder and share purchase agreements in London.
7 days ago
The new platform will largely use local components and has been dubbed the ‘A Main Platform’ with the first electric vehicle set to roll out in 2026, specifically for the Chinese market.