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Mahindra Thar not a SUV according to GST council definition? (Clarification)

As per the recent official council meeting, the definition of SUVs has been changed and this has affected the tax rates on many SUVs that were already on sale. The tax rates on many such SUVs have come down as per the new definition. A new criterion has been set and only the vehicles that fulfil the criteria can be called as SUVs and will attract up to 20-22 per cent GST. Surprisingly, Mahindra Thar which is a very popular 4×4 SUV in India does not fall under the category of SUV due to new criteria. This means Mahindra Thar will attract lower tax rates.

Update: As per the official press release “The higher rate of compensation cess of 22% is applicable to motor vehicle fulfilling all four conditions, namely, it is popularly known as SUV, has engine capacity exceeding 1500 cc, length exceeding 4000 mm and a ground clearance of 170 mm or above”

The Mahindra Thar will still attract a 20% tax as it meets all the criteria except for the length, which is sub-4m. While the definition of the SUV might have changed, we all know how Thar is a true-blue SUV and can conquer most difficult terrains with utmost ease.

Mahindra Thar not a SUV according to GST council definition? (Clarification)

New Definition of an SUV

For a vehicle to be classified as an SUV as per GST Council’s new definition, it should be popularly known as an SUV. The next is the length of the vehicle. The vehicle’s length should be over 4,000 mm and it should also have an engine capacity of over 1,500 cc. Other than this, the ground clearance of the vehicle should also be greater than 170 mm. If a vehicle does not meet any of these parameters, it cannot be qualified as an SUV.

Mahindra Thar not a SUV according to GST council definition? (Clarification)

Vehicles that are qualified as an SUV in the purview of GST will attract the highest rate of tax which is 28 percent GST and 22 per cent cess or 50 percent total tax. If a vehicle does not meet this criterion will attract lower rates of cess which will be over and above the 28 percent GST that is already there on the SUVs.

Why is Thar not an SUV

We all know that Mahindra Thar is a very popular 4×4 SUV in India. It is in fact one of the most affordable 4×4 SUVs in the country. It is a capable SUV both on and off the road and it is popular among people as an SUV only. However, as per the new definition, Thar does not fall under the SUV category. It has a ground clearance of 226 mm which is way above the 170 mm mark mentioned by GST council. The SUV is offered with petrol and diesel engine option and both these engines are above 1,500 cc. However, the overall length of the Thar does not meet the criteria. For Thar to be categorised an SUV the length of the vehicle should be over 4,000 mm. The overall length of Mahindra Thar is only 3,985 mm.

Mahindra Thar not a SUV according to GST council definition? (Clarification)

As the Thar does not meet the length or size criteria, it cannot be called as an SUV. This means the on-road price of the Mahindra Thar might come down. While Mahindra Thar does not qualify as an SUV, its rival Force Gurkha does qualify as an SUV because it meets all the criteria as per the GST council’s new definition. Mahindra Thar is a capable SUV. It is available with both petrol and diesel engine options. The petrol version of the car is powered by a 2.0 litre turbocharged mStallion engine that generates 150 Ps and 320 Nm of peak torque. The diesel version uses a 2.2 litre mHawk turbocharged engine that generates 130 Ps and 320 Nm of peak torque. Both petrol and diesel engine options are available with manual and automatic transmission options and 4×4 is a standard feature.