In what seems to be a blow for car makers, the Indian Government is planning to revise the rules and regulations regarding the ground clearance of cars. According to sources, major auto makers have floundered with laws and thus, the government is expected to change the parameters to measure the ground clearance and taxation policy. The old measuring system has given way to a new GC Measuring Procedure, which states that the the ground clearance will now be measured in the unladen state of vehicle.
As per the current prevalent law, the government imposes additional duty on cars that have a ground clearance above 170 mm, which in turn are called as Sports Utility Vehicles (SUVs). Presently, ground clearance of the vehicle is measured in fully laden condition by the government of India. It was reported that home grown major Mahindra & Mahindra altered the ground clearance of its famous model XUV500 in order to evade the additional tax burden.
It must be noted that Sports Utility Vehicles attract 30 per cent excise tax while for a car longer than 4metre, the duty stand at 27 per cent. The company intentionally lowered the ground clearance of the car from 200 mm to 160 mm by placing a stone guard beneath the engine and all this resulted in XUV500 escaping the additional tax burden, which in turn lowered the price of vehicle by almost Rs. 30000.
Now the Government of India has recognised how car makers are deriving benefits by finding loopholes in the rules and regulations. As of now, benchmarks shall be revised and the ground clearance of the vehicle will now be measured in the unladen state of car in order to avoid any further issues. It is said that with suspension contributing to unladen state, the SUV of Mahindra & Mahindra may have an additional ground clearance of 30 mm to 40 mm, which could make the company vulnerable to pay additional taxes. The other option of lowering the stone guard cannot help the company as the car could crash in on almost every speed breaker.
On asked about the issue Pawan Goenka, President of Mahindra & Mahindra was quoted as saying, “If this new regulation comes in we won’t be able to modify our cars and will just have to accept the SUV tax. “We will have to pass on the additional cost to customer.” So with company officials hinting at paying the additional tax burden, it can lead to Mahindra & Mahindra increasing the price of XUV500 as the additional cost will be bore by the domestic buyers as soon as the new regulations come into take effect.
