Indian Government Defines What is an SUV, and the Tax that You Have to Pay to Buy it

When it comes to SUVs in India, there are several different kinds of cars that claim to be Sports Utility Vehicles, or SUVs in short. But what makes an SUV? The Government of India is putting an end to this confusion by coming out with a definition of what an SUV is.

The Goods and Services Tax (GST) Council, which is chaired by the Finance Minister and is composed of state finance ministers, has come out with a standard definition of what makes an SUV - one of the most popular types of cars sold in India. As of now, different states had different definitions of what makes an SUV which often leads to confusion between automakers and car buyers as to what an SUV really is. Now, the standard requirement for a car to be able to call itself an SUV is that the vehicle should have an engine capacity exceeding 1500cc, have a length longer than 4000mm, and should have a ground clearance of 170mm.

If a car fails to comply with any one of these conditions, it will not be classified as an SUV. The council has made it clear, it has to meet all three criteria in order to get the SUV classification. Currently, such a car attracts 28 percent of GST and 22 percent of cess, taking the total to 50 percent. 

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In the coming days, the committee will also be taking a call on whether Mobility Utility Vehicles, or MUVs in short, should also need to meet these conditions in order to be able to get the classification. Stay tuned for more updates.