[Stolidus500]

Originally Posted by Chhanda Das

Yes, both the Maruti Suzuki Espresso and the Tesla Model X are "popularly" known/marketed as SUVs. Now a 1.6 petrol Creta costing around INR 13 lakhs would attract the same rate of 22% cess as a 4x4 diesel Fortuner costing approximately INR 45 lakhs. Makes perfect sense

There is no 1.6 creta anymore on sale. If it was, it would attract the higher cess and higher insurance slab too. If criteria was based on price, then same can be said about that too. Ex: Car with price of 19,90,000 has lower cess and same car's top model 20,50,000 has higher cess.

There will always be edge cases in all scenarios, it's upto car manufacturers to decide, which scenario suits them the best. 1500 cc engine with lower cess or 1600 cc with higher cess.

It's whole other discussion if this cess makes sense in the first place.

[giri1.8]

Will they allow non SUVs to be advertised as an SUV?

[impala]

Does anyone know the reason to specifically target SUVs? What about sedans with similar power and torque, longer length/wheelbase etc? For the kind of roads in Bangalore, ground clearance becomes a necessity and not a luxury!

[autobahnjpr]

It is upto the manufacturer to decide the selling price. What is the co-relation with taxes? Up till some time back, Fortuner used to cost appx 30 lakhs. So, tax rates classification and the price of vehicle are not co-related. 1.5 crore SUV will also be eligible for same GST as 30 lakhs or 45 lakhs. XUV, Creta, Tuscon, BMW, Audi. - all those who fall under a certain category will pay a certain tax.

Originally Posted by Chhanda Das

Yes, both the Maruti Suzuki Espresso and the Tesla Model X are "popularly" known/marketed as SUVs. Now a 1.6 petrol Creta costing around INR 13 lakhs would attract the same rate of 22% cess as a 4x4 diesel Fortuner costing approximately INR 45 lakhs. Makes perfect sense

[Voodooblaster]

The cubic capacity based differentiation should be scrapped in favour of HP/kWatts for tax and insurance

With advent of Turbo in smaller Petrols, many low displacement engines that are powerful than their higher displacement counterparts

Eg: Maruti Wagon R 1.2 litres has a higher Liability (third party ) insurance premium than the Polo 1.0 Turbo TSI. The logic is that higher the displacement, higher the power and hence chance of accidents

Most of these laws are a couple of decades old and not in tune with the latest trends

[GeeTee TSI]

A hilarious quagmire that our bureaucracy has landed themselves in!

Rolls Royce uses a very English terminology 'high sided vehicle', which begs the question why not have height to distinguish 'SUVs' and kerb weight. No models can sidestep these criteria

[Chhanda Das]

Originally Posted by autobahnjpr

It is upto the manufacturer to decide the selling price. What is the co-relation with taxes?

Here is the moot point about the correlation of prices to taxes :-
It is ridiculous to tax a car priced at INR X at the same rate as a car priced at more than INR 3X. I cannot believe that it is so difficult to understand something so simple

[shyampsunder]

Originally Posted by Chhanda Das

Here is the moot point about the correlation of prices to taxes :-
It is ridiculous to tax a car priced at INR X at the same rate as a car priced at more than INR 3X. I cannot believe that it is so difficult to understand something so simple

Yes, that's why it's a percentage and not a flat rate. A car costing 10L will pay 2.2L in cess whereas a car costing 1 crore will pay 22 lakhs in cess.

10x increase in prices = 10x increase in taxes.

In fact, from a tax maximization perspective which our bureaucrats tend to follow, the theory is that luxury goods should be taxed lesser than essentials to maximize tax collections. So that's something to think about. Here is a long academic paper on this subject link

[Chhanda Das]

Originally Posted by Stolidus500

There is no 1.6 creta anymore on sale. If it was, it would attract the higher cess and higher insurance slab too.

Oh no, please don't tell me that I cannot sell my 1.6 petrol Creta and I do not have to pay the higher cess in the course of "furtherance of business" with my car

Originally Posted by shyampsunder

A car costing 10L will pay 2.2L in cess whereas a car costing 1 crore will pay 22 lakhs in cess.

Yes, no one has ever heard of tax slabs, have they ?

Originally Posted by shyampsunder

the theory is that luxury goods should be taxed lesser than essentials to maximize tax collections

The theory was that increasing taxes on Chinese solar cells would boost our local production but in reality, the opposite has happened because prices went up and demand went down leading to almost a complete stoppage of new solar installations at the household level. Theories can be very different from real life practicalities

[Stolidus500]

Originally Posted by Chhanda Das

Oh no, please don't tell me that I cannot sell my 1.6 petrol Creta and I do not have to pay the higher cess in the course of "furtherance of business" with my car

Cess is also on used cars? I don't get your point here. I haven't heard about paying cess on your existing car. Do tell me, if I am misunderstanding something.

[steadfast]

I don't understand the hue and cry of members here. This change should actually make cars cheaper.

One side, we keep cribbing about high prices and taxes and other hand when govt has brought this policy we are still complaining.

Or is there something that I have understood from the policy that is different from others. Ideally we as consumers should be welcoming this move unless I am wrong in my understanding of policy.

[RoadTiger]

What about the Crysta/ Hycross ?

About point no. 1 - they are not known or marketed as SUVs. They are without doubt MPV/ MUVs. So, since criteria point 1 not met, not taxed like an SUV ?

[TDIRaghav]

Originally Posted by Chhanda Das

So let me get this straight. The 1.6 petrol and 1.6 diesel Creta are SUVs while the 1.4 diesel, 1.4 petrol, 1.5 petrol and 1.5 diesel Creta are not SUVs ? Do the politicians have any idea how stupid that sounds ? This is a perfect example of one of the reasons why we Indians get laughed at on the world stage despite what our leaders try to project

I believe that Creta is more than 4000 mm so it will anyways be considered an SUV for GST purposes. The dilemma will be when we consider the sub 4m compact SUVs such as the Nexon, Brezza, Venue, Sonet et al.

[shyampsunder]

Originally Posted by Chhanda Das

Yes, no one has ever heard of tax slabs, have they ?

Today only the top 10% of the population can even afford the most basic car. Trying to impose different tax slabs to milk the top 1% vs the top 10% is a pointless exercise with no winners.

No bureaucrat is going to lower the taxes by having tax slabs if that's the dream here with various slabs given that the most basic car costs more than annual per capita income of the average citizen. It will only mean luxury cars getting taxed even higher.

I appreciate this clarification on SUV taxation to prevent manufacturers getting caught between the center and the state on this issue but at the same time having vague statements like being popularly known as an SUV is inviting trouble and confusion.

[shancz]

Originally Posted by Stolidus500

Cess is also on used cars? I don't get your point here. I haven't heard about paying cess on your existing car. Do tell me, if I am misunderstanding something.

Ex-showroom price = Factory price + GST + Cess.
On road price = Ex-showroom price + RTO charges + Insurance + extras.
Here's a screenshot for the City ZX CVT for reference :
Credits to Providers : MyCarHelpline


Try other cars too and see how much do the manufacturers charge for each car at factory

Originally Posted by steadfast

I don't understand the hue and cry of members here. This change should actually make cars cheaper.

The hue and cry isn't about the cars getting cheaper(very slightly) but the definition of what qualifies as an "SUV".
The current version doesn't make sense and honestly shows an attitude of indifference by the folks who drafted it.

Personally I expect it to be modified in a more sensible way before being executed.