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Leased vehicles: Govt provides clarity on tax rate

Effective GST rate on mid-size cars will be 45%, while on large cars it would be 48%

Press Trust of India  |  New Delhi 

GST

Leasing of vehicles purchased prior to July 1 will attract a equivalent to 65 per cent of the current applicable rate for a period of 3 years, the said on Thursday.

The Council, comprising Union Minister and state ministers, in its last meeting on October 6 had decided to levy concessional rate for leased vehicle.

"Leasing of vehicles purchased and leased prior to July 1, 2017, would attract at a rate equal to 65 per cent of the applicable rate (including Compensation Cess)," the ministry said in a statement.

Also such vehicles when sold will attract of 65 per cent of the applicable (Goods and Services Tax) rate, including compensation cess.

Sale of vehicles by a registered person who had procured the vehicle prior to July 1, 2017 and has not availed any input credits of central excise duty, or any other taxes paid on such motor vehicles, will also be subject to 65 per cent of applicable rate, it added.

These rates would apply for a period of three years with effect from 1st July, 2017.

The effective rate on mid-size cars will be 45 per cent, and on large cars it would be 48 per cent.

The rate will be 50 per cent on sports utility vehicles (SUVs), which include cars with length exceeding 4,000 mm and having a ground clearance of 170 mm and above.

First Published: Thu, October 12 2017. 23:32 IST
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