GST on SUV Cars: GST and Compensation Cess Rates on SUV Cars in India
Goods and Services Tax (GST) applies to the manufacture and sale of all Sports Utility Vehicles (SUVs) in India, with some models also attracting an additional compensation cess of up to 22%.
In this article, we discuss the applicability of GST on SUVs in India, including the HSN code and GST rate on SUV cars, the applicable cess on SUVs, and the definition of SUVs for discerning the rate of cess.
What is an SUV?
A sport utility vehicle (SUV) is a type of car that combines certain features of passenger cars with features from off-road vehicles. For instance, a raised ground clearance or a four-wheel drive. However, for compensation cess purposes, the GST Council has a separate definition for SUVs, which we have explained in the later part of the article.
There are various types of SUV cars in India, ranging from compact models to full-size luxury ones with seven seats. As a result, different models are liable to different GST and compensation cess rates.
GST on SUVs
GST is levied on SUVs at 28% unless the SUV is an electric vehicle. Electric vehicles in India attract a GST rate of 5%.
| Description | GST Rate |
| Electrically-operated vehicles | 5% |
| Other motor cars and motor vehicles (other than those used for the transport of 10 or more persons) | 28% |
In addition to GST, SUVs are liable to a compensation cess. Continue reading to find out the compensation cess rates applicable to SUVs.
Compensation Cess on SUVs
To remove all confusion, the GST Council, in December 2022, classified motor vehicles as SUVs for the purpose of compensation cess only if they satisfy the following four conditions:
- It is widely recognised as an SUV
- Has an engine capacity exceeding 1,500 cc
- Has a length greater than 4,000 mm
- Possesses a ground clearance of 170 mm or higher
However, considering that there are various other types of SUVs in India, only those SUVs that meet the above conditions are liable to a compensation cess of 22%. Other SUVs and motor vehicles will be liable to different rates of compensation cess depending on their length and engine type/capacity, as follows:
| Description | Compensation Cess | |
| (a) | Petrol/LPG/CNG vehicles with engine capacity up to 1200 cc and lengths up to 4000 mm | 1% |
| (b) | Diesel vehicles with engine capacity up to 1500 cc and lengths up to 4000 mm | 3% |
| (c) | Motor vehicles with an engine capacity not exceeding 1500 cc, other than (b) above | 17% |
| (d) | Motor vehicles of engine capacity exceeding 1500 cc, other than SUVs | 20% |
| (e) | SUVs, including utility vehicles (i.e. with a length exceeding 4000 mm, engine capacity exceeding 1500 cc and a ground clearance of 170 mm. and above) | 22% |
| (f) | Motor vehicles except those listed above, and also excluding motorcycles, ambulances, three-wheelers, and electric/fuel cell vehicles | 15% |
If the table above is confusing, do not worry! We have listed down the popular SUV cars and the GST rates and compensation cess applicable to them:
| Car Model | GST Rate | Compensation Cess* |
| Hyundai Creta | 28% | 17% |
| Hyundai Venue (petrol)/(diesel) | 28% | 1%/3% |
| Mahindra XUV300 (petrol)/(diesel) | 28% | 1%/3% |
| Nissan Magnite and Renault Kiger | 28% | 1% |
| Maruti Suzuki Brezza | 28% | 17% |
| Maruti Suzuki Grand Vitara | 28% | 17% |
| Tata Nexon (petrol)/(diesel) | 28% | 1%/3% |
| Tata Punch (petrol) | 28% | 1% |
| Kia Sonet (petrol)/(diesel) | 28% | 1%/3% |
| Kia Seltos | 28% | 17% |
| Skoda Kushaq, Volkswagen Taigun | 28% | 17% |
| MG Astor | 28% | 17% |
| Thar (with engine capacity exceeding 1.5 litres) | 28% | 20% |
| Mahindra XUV700, Mahindra Scorpio-N and Mahindra Scorpio Classic | 28% | 22% |
| Tata Harrier and Tata Safari | 28% | 22% |
| Hyundai Alcazar (only petrol with engine capacity exceeding 1.5 litres) | 28% | 22% |
| Hyundai Tucson | 28% | 22% |
| Jeep Compass (petrol) | 28% | 17% |
| Jeep Compass (diesel) | 28% | 22% |
| Jeep Meridian | 28% | 22% |
| BMW X1, Volvo XC40, Mercedes GLS, Audi Q3, and BMW X7 | 28% | 22% |
*Please note that the compensation cess rates in this table are as per the popular model/engine type of the vehicles available in the market (For example, petrol, where not specified) and considers the basic engine capacity. There could be models with a larger engine capacity offered by the car manufacturer or other fuel types. This could affect the compensation cess rates. Please check with your car dealer at the time of purchase for the rates in force.
Although, this fixed definition for SUVs proposed in this statement is not expected to bring about significant changes in the on-road prices of SUVs. The definition excludes almost all sub-four-metre SUVs from being classified as SUVs, while most larger SUVs meet the criteria. This means that the cost of sub-four-metre SUVs will likely be unaffected, while larger SUVs may continue to fall under the higher tax rate slabs.
Frequently Asked Questions
What is the GST rate on SUV cars?
The current GST rate on most SUV cars is 28%, along with an additional compensation cess levied as per the table above.
What is the GST rate on cars?
All passenger vehicles (PVs) in India are categorised under the 28% GST slab, with a few exceptions detailed above.
What is the GST rate on car batteries?
The GST rate on Lithium-ion batteries is 18%.
What is the GST rate on tyres?
In India, the GST rate on tyres is 28%, whereas that of tyre tubes is 18%.
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