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Siam seeks same GST rate for small cars,MUVs

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The automobile industry’s apex body,Society of Indian Automobile Manufacturers (Siam), has sought a standard tax rate for small car sand multiutility vehicles(MUVs)incoming national goods and services tax(GST),while pressing for an additional eight percent tax on other cars.
It has also suggested a minimumre laxation of eight per cent in taxes on electric/hybridoral ternatefuel cars.And,a standard rate on two-wheelers,three-wheelers and commercial vehicles.“For along time,there were only two rates of excise duties on passenger cars.
In recent years,the bigger car rates have got fragmented and, today, we have four rates for passenger cars, excluding electric vehicles and hybrid electrics,for which lower rates are applicable. There is a need to look at the GST rate for automobiles sensitively,”Siamsaid.
Currently, a small car attracts 12.5 percent excise duty. This should have a length of less than four metres and an engine capacity of less than 1,200cc for petrolorless than1,500ccforadieselcar. Maruti’sAltoandWagonR, and Hyundai’si10,aresmall cars.Interestingly,two-wheelers, three-wheelers, trucks andbusesenjoythesame exciseduty.
At the next segment of vehicles, the excise rate almost doubles to 24percent. This is defined by a length of over four metres but an engine capacity similar to a small car.Toyota’s Etios and the Honda City are in this segment.The nexts lab of 27percent excise duty is imposed on vehicles over four metres and with a petroleng ineof over1,200 cc ordieselengine ofover1,500cc.TheHonda Accord and Maruti Ciaz (petrol)areinthissegment.
The highest excise of 30 percent is imposed on MUVs and sports utility vehicles.These must have a length of over four metres,engine of over 1,200cc for petrol or over 1,500 cc for diesel,and a ground clearance over170mm.
The GST regime is expected to subsume all taxes that are now levied at the Centre (excise duty) and state levels(sales,roadand registration tax).
Business Standard New Delhi,07th September 2016

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