Relief on purchase & leasing of motor vehicles CGST notification no. 37/2017

Seeks to prescribe Central Tax rate on the leasing of motor vehicles.

Government decides to provide relief in GST rates for vehicles purchased, leased prior to GST rollout

GST provides relief in the applicable tax rates for vehicles purchased or leased prior to roll out of GST i.e. 1st July,2017. Itwill attract a tax equivalent to 65% of the current applicable GST rate(including compensation cess) for a period of 3 years. Even the sale of such vehicles(procured the vehicle prior to 1 July 2017) by a registered person and did not/has not availed any input tax credits of central excise duty, VAT or any other taxes paid on such motor vehicles, will also be subject to 65% of applicable GST rate (including compensation cess).
These rates would apply for a period of three years with effect from 1 July 2017.Hence the effective GST rate(including compensation cess) after the issuance of notification will be

• 45% on mid-size cars
• 48% on large cars
• 50% on sports utility vehicles (SUVs) (which include cars with length exceeding 4,000 mm & having a ground clearance of 170 mm and above)

A similar notification on leasing of motor vehicles has also been passed by IGST(rate). Click here to view the IGST(rate) notification no.38/2017 dated 13th October ,2017

[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY PART II,SECTION 3, SUB-SECTION (i)]

GOVERNMENT OF INDIA
MINISTRY OF FINANCE
(Department of Revenue)

Notification No. 37/2017-Central Tax (Rate)

New Delhi, the 13th October, 2017

G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 9 of theCentral Goods and Services Tax Act, 2017 (12 of 2017), the Central Government, on therecommendations of the Council, hereby notifies the central tax on intra-State supplies ofgoods, the description of which is specified in column (3) of the Table below, falling underthe tariff item, sub-heading, heading or Chapter as specified in the First Schedule to theCustoms Tariff Act, 1975 (51 of 1975), as the case may be, as specified in the correspondingentry in column (2), of the Table below, at the rate specified in corresponding entry in
column (4) and subject to relevant conditions annexed to this notification, if any, specified inthe corresponding entry in column (5) of the Table aforesaid:

2. Provided that nothing contained in this notification shall apply on or after 1st July,2020.
Explanation For the purposes of this notification, –

(i) Tariff item, sub-heading heading and Chapter shall mean respectively a tariffitem, heading, sub-heading and Chapter as specified in the First Schedule to the CustomsTariff Act, 1975 (51 of 1975).

(ii) The rules for the interpretation of the First Schedule to the said Customs Tariff Act,1975, including the Section and Chapter Notes and the General Explanatory Notes of theFirst Schedule shall, so far as may be, apply to the interpretation of this notification.

[F.No.354/117/2017- TRU (Pt. III)]

(Ruchi Bisht)
Under Secretary to Government of India

You may also like :

• Download the official notification no. 37/2017 Central Tax(rate) relating to leasing of motor vehicles under GST regime dated 13.10.2017
• Download the official notification no. 38/2017 Integrated Tax(rate) relating to leasing of motor vehicles under GST regime dated 13.10.2017