NEW DELHI: Prices of MPV (multi-purpose vehicle) and multi-utility vehicles (MUVs), which are above four meters are expected to go up by 2% as GST Council increases cess on these vehicles by 2% from the current 20% to 22%.
Some of the models which may see a price hike include Maruti Suzuki’s recently launched Invicto and Toyota’s Innova Crysta and Hycross Petrol. The GST Council in its recent meeting announced including all Utility Vehicles, be it SUV, MUV or MPV under one compensation cess bracket of 22%.
The council has defined that all vehicles that measure more than 4000mm in length, have an engine displacement of more than 1,500cc, and with a ground clearance of 170mm or more will attract a 22% compensation cess over and above 28% GST.
Shashank Srivastava, Senior Executive Officer (Marketing and Sales) at Maruti Suzuki India, said that the decision clarifies the definition of vehicles attracting the highest cess, especially with the ground clearance parameter included. He added that a price hike is unlikely to impact them as they have only Invicto MPV, which was launched last week, that meets all three criteria.
Many carmakers are now waiting for the fine print of the announcement to see which models in their line-up will be impacted. Swapnesh Maru, Executive Vice President and Chief Compliance Officer at Toyota Kirloskar Motor, said, that they will wait for the notification to understand the details before assessing the impact. A Mahindra & Mahindra spokesperson said,
“The change relates to a recategorisation of GST rate, based on unladen ground clearance, versus the current laden ground clearance criterion. We await the official notification related to this change, which should also include the definition of unladen ground clearance and the process to measure the same. Once received, we will approach the certification agency for potential recertification of the relevant models, based on the updated definition, if necessary.”