The forthcoming 49th GST council meeting would get conducted in the last week of February concerning the temporary relief to the auto industry while it seems to postpone the hike in the rate of compensation cess proposal which is been subjected to be applicable for the MUVs similar to the SUVs that counts beneath the identical category of a car length, engine capacity among others.
The Fitment committee postpones the proposal to treat MUVs at par with SUVs nominated by the GST council until the committee would secure a precise discussion with the industry people.
Tax expert told that “Fitment committee examined the proposal on reservations expressed by Haryana, citing leakage of GST revenue in absence of clarity between MUVs and SUVs,”
The nominated Fitment committee investigated the case to acknowledge the request for equivalent treatment by Harayana when comparing it with cross-over utility vehicles, such as Toyota Innova, Kia Carnival, Isuzu V-cross, Hi-Lander, and others.
“Fitment committee after detailed discussions decided that the issue still needs more clarity and to come to a conclusion or decision, it can be done only after detailed study in consultation with all stakeholders,” a tax expert said.
The proposal arrived at the 48th GST council meeting, states including Haryana mentioned, auto players, are engaged in tax evasion amid ambiguity between many car models not called SUVs but counted beneath similar specifications, as described under the GST law for the treatment of SUVs this emerged when the industry before the government approached for transparency on cess applicability rates on SUVs and at the time of discussion at GST Council.
As per the state’s urge, Union Finance Minister and Chairman of GST Council Nirmala Sitharaman after that has directed the Fitment committee to analyze the proposal raised by states.
Important: GST Council Applies 22% Cess on SUVs & Prosecution Limit to INR 2 Cr
Under the proposal, the treatment of MUVs similar to SUVs is to be done through the fitment committee despite when it is not known as SUVs. On SUVs including all motor vehicles posing a length >4000mm, ground clearance of 170mm, and engine capacity >1500cc a 22% compensation cess is to be levied
