Automobile Manufacturers seeks same GST rate for small cars, MUVs

The auto mobile industry’s apex body,Society of Indian Automobile Manufacturers (Siam), has sought a standard tax rate for small cars and multi utility 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 minimum relaxation of eight percent in taxes on electric / hybrid or alternate fuel 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 rate shave 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, ”Siam said. 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 petrol or less than1 ,500cc for a diesel car. Maruti’s Alto and WagonR, and Hyundai’s i 10, are small cars.Interestingly,two-wheelers, three-wheelers, trucks and buses enjoy the same excise duty. At the next segment of vehicles, the excise rate almost doubles to 24 percent. 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.Then next slab of 27 percent excise duty is imposed on vehicle so very four metres and with a petrol engine of over 1,200cc or diesel engine of over 1,500cc.The Honda Accord and Maruti Ciaz (petrol)are in this segment. The highest excise of 30 percent is imposed on MUV sand sports utility vehicles.These must have a length of over four metres,engine of over 1,200cc for petrol or over 1,500cc for diesel,and a ground clearance over 170mm. The GST regime is expected to subsume all taxes that are now levied at the Centre (excise duty) and state levels (sales,road and registration tax). – www.business-standard.com[07-10-2016]

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