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The finance ministry is soon expected to come out with clarification that the ground clearance needed to classify a vehicle for high duty structure of 30% will be without the laden weight.
"Unladen weight will be the parameter to calculate ground clearance of a vehicle qualifying for the higher duty. Accordingly all sports utility vehicles (SUV) will be applicable for higher excise duty of 30%" explained an official source.
The only exception will SUV of Renault company which has engine capacity below 1,500 cc.
As per definitions, ground clearance or simply clearance or ride height is the amount of space between the base of an automobile tire and the underside of the chassis; or, more properly, to the shortest distance between a flat, level surface, and any part of a vehicle other than those parts designed to contact the ground (such as tires, tracks, skis, etc.).
The clarification is expected following representation from industry that ground clearance, one of the criteria to qualify a vehicle for higher duty of 30% should be calculated with laden weight and not unladen weight. With laden weight, the ground clearance comes ground 150-160 mm , below the benchmark of 170 mm.
The industry has submitted that with laden weight with passengers and other load, the capacity needed for ground clearance comes down to 150-160 mm, below the specified 170 mm. Therefore ground clearance should be considered with laden weight.
The unladen weight of any vehicle is the weight of the vehicle when it’s not carrying any passengers, goods or other items. It includes the body and all parts normally used with the vehicle or trailer when it’s used on a road. Laden weight , correspondingly is the weight with passengers , goods an other items carried on the vehicle over and above its standalone weight.
As per the notification issued by the Central Board of Excise and Customs (CBEC), the higher duty of 30% will be applicable for vehicles with engine capacity of 1,500 cc and above, length of 4 mt and above and ground clearance of 170 mm and above.
Earlier, the revenue Department today clarified that Maruti SX4 and Toyota Corolla Altis will attract lower excise duty of 27% and not the higher levy prescribed for SUVs.
However officials added that SUVs occupy greater road and parking space and ought to bear a higher tax.
