GST Council decides to levy uniform taxation for utility vehicles

New Delhi, July 11, 2023

India's Goods and Services Tax (GST) Council said that uniform taxation would be levied on multi utility vehicles and sports utility vehicles, according to a statement.

The body, chaired by India's Finance Minister Nirmala Sitharaman and comprised of state finance ministers, decided all large cars, by whatever name they are called, will attract 22% cess, which is an additional tax imposed over and above GST. The cess tax will be on top of a 28% tax if their length exceeds 4000 mm, have engine capacity of over 1500 cc, and have ground clearance of 170 mm.

However, there is ambiguity whether a cess of 20% or 22% should be imposed on multi utility vehicles.

The GST Council also said in the statement that the sale of food and beverages in multiplexes should attract 5% tax and not 18%, to ensure uniformity in tax rates across Indian states.

The clarification was sought by industry bodies and multiplex operators who were being asked to charge 18% by some states. The GST Council, however, said movie tickets and food items bundled and sold will attract 18% tax.

To manage disputes related to GST, appellate tribunals will be set up in phases. "Our effort and estimate is to make GST tribunal operational in 4-6 months," said Revenue Secretary Sanjay Malhotra at a press briefing.

The creation of GST Appellate will help in the resolution of a multitude of litigations pending under GST, said Abhishek Jain, a partner at KPMG.

The GST Council also decided to provide tax exemptions to satellite launch services provided by private companies.

It also decided to impose a 28% tax on funds that online gaming companies collect from their customers.

[Reuters]