A few months back, a new excise duty ruling created a lot of flutter as well as confusion among the car manufacturers. It directly targeted SUVs and slapped an extra 3% of excise duty for them being a more apt vehicles on Indian roads.
Unfortunately, the vague definition of SUVs that was given also included some cars which, by very basic nature and common sense, appeared to be sedans! The definition engulfed anything bigger than 4 meters in length & 1500cc engine which had a greater ground clearance than 170mm. These cars included Honda Civic, Maruti SX4 and Toyota Corolla Altis which fell under the ambit of ‘SUVs’.
Some good knowledgeable folk must have understood the big gaffe and in a new development, the government has officially clarified that the above mentioned cars will not be subjected to SUVs’ extra excise of 30% and will be considered as regular Sedans.
This will save these sedans valuable 3% extra unnecessary surcharge as they will now pay the 27% excise which their fortunate counterparts (with under 170mm GC) pay. This comes as a much needed clarification and will not demotivate manufacturers from providing sedans with higher ground clearance.
Talking about this definition, Mahindra has very recently made a mockery of it by installing a ‘Stone Guard’ under XUV5OO which reduces the ground clearance to under 170mm and hence it is no more an ‘SUV’! Its time authorities framing such rules also consider common sense before letting these rulings out!
Source: Economic Times