Auto industry body SIAM today sought exemption from cess on 10-13 seater vehicles under the recently introduced Goods and Services Tax (GST) framework.
It, however, hoped the new cess rates announced last week would now remain stable and not be increased frequently.
"SIAM feels that the long standing anomaly in the taxation of 10-13 seater vehicles could have been fully corrected and these should have been fixed at a GST rate of 28 per cent without any cess as these are public transport vehicles and not for personal use," it said in a statement.
SIAM hoped this anomaly would be addressed in future, it added.
In the pre-GST era, such vehicles enjoyed concession in excise duty rate.
After GST implementation, the government exempted compensation cess only on ambulances that can carry up to nine persons.
These 10-13 seater vehicles, including ambulances, now attract top tax rate of 28 per cent with 15 per cent cess.
The industry body also hoped that now the states would not unilaterally increase the road taxes as now they would be receiving increased compensation through the revised cess.
Though, the Society of Indian Automobile Manufacturers (SIAM) felt relieved that a GST Cess of 25 per cent has not been imposed across the board on all larger cars as was the apprehension.
With the new GST cess, the taxation on mid-sized passenger cars have been almost restored to the pre-GST levels, while taxes on luxury cars and SUVs have been slightly moderated as compared to the pre-GST rates, it said.
"The government has also recognised the need to encourage hybrid vehicles by creating a differential taxation on hybrid cars, which was one of SIAM's request and this is a welcome step," SIAM said.
Last week, GST Council increased cess on mid-sized cars by 2 per cent, on large cars by 5 per cent and that of the SUVs by 7 per cent.
The council, headed by Finance Minister Arun Jaitley, however, decided not to levy any additional tax on small petrol and diesel cars of up to 1200 cc as well as on hybrid ones.
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