Sedans like Maruti SX4 attract duty of 27% - CBEC Clarifies
BY amending notification dated 01.03.2013, for serial number 284 and the entries relating thereto appearing in notification dated 17.03.2012, the following serial numbers and the entries were substituted, namely:-
"284 | 8702 and 8703 | Following motor vehicles, namely:- (ii) Motor vehicles of engine capacity exceeding 1500 cc other than motor vehicles specified against entry at Sl. No. 284A. | 24% 27% | - - |
284A | 8703 | Motor vehicles of engine capacity exceeding 1500 cc, popularly known as Sports Utility Vehicles (SUVs) including utility vehicles. Explanation. - For the purposes of this entry, SUV includes a motor vehicle of length exceeding 4000 mm and having ground clearance of 170 mm and above. | 30% | -"; |
The Board informs that it has received references from motor vehicle manufacturers, seeking clarification as to whether the excise duty of 30% is applicable on sedan cars like MarutiSX4, Honda Civic and Toyota Corolla Altis.
The manufacturers state that the aforesaid motor vehicles namely, Maruti SX4, Honda Civic and Toyota Corolla Altis satisfy all the three conditions mentioned at Sl. No. 284A viz. (i) the engine capacity exceeds 1500 cc; (ii) the length exceeds 4000 mm and (iii) ground clearance is 170 mm and above but they are NOT POPULARLY KNOWN AS ‘SPORTS UTILITY VEHICLES'. Inasmuch as they are in the nature of ‘SEDAN' and may not get covered in the said entry 284A, the manufacturers submit.
So, the Board has examined the issue and informs -
"In the Budget 2013-14, excise duty was increased from 27% to 30% on motor vehicles of engine capacity exceeding 1500 cc, popularly known as Sports Utility Vehicles (SUVs) including utility vehicles. In the Explanation appended at Sl. No. 284A of the aforecited notification, it has been mentioned that for the purposes of this entry, SUV includes a motor vehicle of length exceeding 4000 mm and having ground clearance of 170 mm and above. From this, it may be seen that the higher excise duty of 30% is applicable on motor vehicles which are popularly known as SUVs and which satisfy all the three conditions, viz. (i) the engine capacity exceeds 1500 cc, (ii) the length exceeds 4000 mm; and (iii) the ground clearance is 170 mm and above. MarutiSX4, Honda Civic and Toyota Corolla Altis are stated to satisfy all the three conditions but, they are not popularly known as SUVs and neither are they known so in trade parlance. They are reportedly known as sedans in trade and common parlance."
The Board, therefore, concludes -
"it is clarified that the aforecited motor vehicles, which are known as sedans, will attract the excise duty of 27% as applicable to large segment cars. [Sl.No . 284 (ii) of the Table in the notification]"
Some respite of 3% in the otherwise gloomy scenario for the car industry.
CBEC Circular No. 972/06/2013.CX., Dated: July 24, 2013