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Maruti SX4, Toyota Corolla Altis Sedan Get Tax Cut
It's official. The Revenue Department has clarified that Maruti Suzuki SX4, Toyota Corolla Altis, Honda Civic and the likes will no longer be classified as SUVs and will rightly fall under the sedan category. Hence, going forward these vehicles will be taxed the previous 27 percent excise, instead of 30% which SUVs incur.
"It is clarified that the afore-cited motor vehicles (Maruti SX4, Honda Civic and Toyota Corolla Altis), which are known as sedans, will attract the excise duty of 27 per cent as applicable to large segment cars", the Central Board of Excise and Customs (CBEC) stated in its official statement.
The controversial rule
It was earlier this year when Finance Minister P Chidambaram put into effect the updated excise duty for SUVs, as part of the Budget, that the whole issue arose. Under the revised rule, SUV were defined as vehicles which had an engine larger than 1.5 liter, an overall length of 4,000+ mm and a ground clearance of more than 170 mm.
Since all India spec vehicles tend to have a have high ground clearance to cope with the Indian road condition, several sedans fell into the SUV segment under the new definition, thus attracting the additional 3 percent tax. Automakers had seeked a clarification from the government regarding the same.
The exemption of sedans from the additional tax will come as a timely relief to Indian automakers which have been reeling under the pressure of falling sales for the past few months.
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