Are you sure you own an SUV? Just a third of car models branded & sold as Sports Utility Vehicles meet official definition – Times of India

Do you own an SUV? You may want to check again, since the criteria for determining GST rates on Sports Utility Vehicles are very specific. In India, Sports Utility Vehicles or SUVs have gained immense popularity, constituting every second car sold. However, as per the official SUV definition, they represent only about one-tenth of total sales.
According to an ET report, among the 47 car models sold as SUVs in India, only about a third meet the criteria set by the government for engine capacity, length, and ground clearance to qualify as SUVs for GST computation.For example, the ground clearance of an SUV should be 170 m and higher, its length 4 metres and more and its engine capacity 1,500 cc and above!
Total car sales rose to a record 4.23 million units in the last financial year, up 8.7% from the previous year. There has been a big shift to SUVs, which surpassed a 50% market share for the first time.

According to the GST Council’s definition, SUV sales amounted to 445,556 units, significantly lower than the 2.13 million reported by car manufacturers. However, this doesn’t diminish the growing preference for SUV silhouettes among consumers.
Factors such as the SUV’s distinct appearance, elevated driving position, and tax benefits have appealed to younger, style-conscious Indian buyers, driving the shift in consumer preferences.
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India imposes a 28% GST on passenger vehicles, with additional compensation cess ranging from 1% to 22%. SUVs bear the highest compensation cess at 22%, resulting in total levies of 50%.
According to industry experts, SUVs have evolved over time, reflecting changes in consumer preferences. While traditionally associated with off-roading capabilities, many SUV models, including popular ones like the Maruti Suzuki Brezza and Hyundai Venue, lack features like all-wheel drive and do not meet GST criteria. Despite this, they remain highly sought-after, primarily for urban use.
VG Ramakrishnan, managing partner at Avanteum Advisors, noted that SUV classification has become more generic, focusing less on off-road capabilities and more on features like body styling and vehicle height. This shift reflects evolving consumer preferences towards vehicles with a higher stance.
The Hyundai Creta led the mid-SUV segment with nearly 163,000 units sold last fiscal, despite lacking off-roading features. In contrast, the Maruti Suzuki Jimny and Mahindra Thar, equipped with all-wheel drive, are compact SUVs, measuring 3,820 mm and 3,895 mm in length, respectively.
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_{Maruti Suzuki’s transition to SUV-branded cars has been remarkably successful, with models like the Brezza and Grand Vitara performing well in the market.
There has been a notable shift in the profile of SUV owners, with larger vehicles once favored mainly in rural areas now gaining popularity across various demographics, Shashank Srivastava, Maruti Suzuki executive council member said.
Tata Motors offers electric vehicles like the Punch and Nexon, in addition to larger SUVs like the Harrier and Safari.
The entry-level SUV segment, including models like the Brezza, Venue, and Kia Sonet, recorded sales of 1.11 million units last fiscal, making it the largest in the market.
Following closely were midsize SUVs such as the Creta, Grand Vitara, Kia Seltos, and Toyota Hyryder, with sales reaching 972,000 units. Premium SUV sales, including models like the Toyota Fortuner and Hyundai Tucson, amounted to 47,000 units.}