Understanding Goods and Services Tax on Diesel-Powered Vehicles
This article clarifies the Goods and Services Tax (GST) implications for diesel-powered vehicles in India. It details how GST is applied to different types of diesel cars, buses, and trucks, including the relevant HSN codes and their corresponding GST rates. The discussion also covers the eligibility criteria for claiming Input Tax Credit (ITC) on diesel vehicles, highlighting conditions under which ITC may or may not be available for businesses.
Grasping the intricacies of Goods and Services Tax (GST) applied to motor vehicles, particularly diesel cars, is a common area of inquiry. This article examines the GST implications for various diesel vehicles, their Harmonized System of Nomenclature (HSN) codes, and associated GST rates.
GST Application for Various Diesel Vehicle Categories
In India, motor vehicles are subject to GST regardless of their fuel type. This means GST is applicable to all diesel-powered vehicles, including cars, buses, and trucks. The specific GST implications for diesel vehicles are determined by their classification and intended use.
Beyond the standard GST, certain motor vehicles may also incur a compensation cess. This additional levy is contingent on factors such as the vehicle's length, engine displacement, and ground clearance.
HSN Codes and GST Rates for Diesel Vehicles
| HSN Code | Description | GST Rate |
|---|---|---|
| 8408 | Compression-ignition internal combustion piston engines (diesel or semi-diesel engines) | 28% |
| 8409 | Diesel engine components | 28% |
| 8413 | Pumps for fuel, lubrication, or cooling in internal combustion piston engines | 28% |
| 8702 | Vehicles designed for carrying ten or more persons | 28% |
| 8703 | Motor cars and vehicles primarily for passenger transport (excluding those under 8702), including station wagons and racing cars, but not cars for persons with physical disabilities | 28% |
| 8703 | Diesel vehicles with engine capacity up to 1500 cc, for individuals with orthopedic disabilities (requires certification from a Deputy Secretary or higher, Department of Heavy Industries, Government of India) | 18% |
| 8704 | Vehicles used for goods transportation | 28% |
Input Tax Credit Eligibility for GST on Diesel Vehicles
According to GST regulations, Input Tax Credit (ITC) is generally not available for vehicles acquired for passenger transport, including:
- Four-wheeled motor vehicles
- Three-wheeled auto rickshaws
- Two-wheeled motorbikes or cycles
- Buses or Tempo Travellers (TT) accommodating up to 13 occupants, including the driver
- Other road-going vehicles
However, ITC may be claimed if the passenger transportation vehicle is purchased for specific business activities such as:
- Providing passenger transport services, taxi services, or bus rental/leasing
- Operating a driving school
- Managing automobile retail outlets, showrooms, or manufacturing facilities