What is the total GST and Cess rate on SUVs in India?

SUVs attract the maximum tax rate: a base GST rate of 28% plus a 22% compensation cess, resulting in a total tax of 50% on the ex-showroom dealer price.

Can a business claim Input Tax Credit (ITC) on purchasing a company car?

Generally, Input Tax Credit on passenger motor vehicles is blocked under Section 17(5) of the CGST Act. However, ITC can be claimed if the vehicles are used for making taxable outward supplies of transportation of passengers, imparting training on driving, or further supply of such vehicles.

How is GST calculated on the sale of used cars?

Under Notification No. 8/2018-Central Tax (Rate), GST on the sale of used cars is calculated on the margin of supply (sale price minus purchase price). If the margin is negative, no GST is payable. The rate is 12% for small/medium cars and 18% for large SUVs.

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Automobile28% GST RateUpdated July 2026

Calculate GST for Cars

Calculate base GST and additional compensation cess on motor vehicles and passenger cars.

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Quick Summary

HSN/SAC Code#8703

Tax CategoryAutomobile

ITC EligibilityBlocked under Section 17(5) for standard business vehicles (except passenger transport or driving schools)

Effective DateJuly 1, 2017 (With subsequent Cess revisions)

Applicable Tax

28%

Standard GST RateHSN Code 8703

GST Rate Explanation

Motor vehicles and passenger cars are classified under HSN code 8703 and attract the highest base GST slab of 28%. In addition to the base GST, a Compensation Cess is levied under the GST (Compensation to States) Act, varying from 1% for small CNG/LPG cars up to 22% for SUVs, bringing the total effective tax rate on luxury vehicles up to 50%.

Base Amount (INR)

Calculation Mode

Net Amount (Before Tax)₹10,000.00

CGST (Central Tax) (14.0%)₹1,400.00

SGST (State Tax) (14.0%)₹1,400.00

Total GST (28%)₹2,800.00

Gross Amount₹12,800.00

Visual Tax Split & Collection Rules

Intrastate Split Allocation

CGST (Central Tax): 14.0%

SGST (State Tax): 14.0%

Within State (CGST + SGST)

When supply is within the same state (intrastate), the CGST and SGST are collected. The total tax is split 50/50 between Central and State governments.

Across States (IGST)

When supply spans across states (interstate), a single Integrated GST of 28% is collected in full by the Central government before allocation.

GST Rate Structure Slabs

Tax Slab	CGST (Central)	SGST (State)	IGST (Integrated)	Notes
0%	0.0%	0.0%	0.0%	Exempted / Nil rated goods
5%	2.5%	2.5%	5.0%	Essential items & services
12%	6.0%	6.0%	12.0%	Standard reduced rate items
18%	9.0%	9.0%	18.0%	Standard general rate items
28%	14.0%	14.0%	28.0%	Luxury / Sin goods & services