Notification No. 05/2017 – Compensation Case (Rate) Updated

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Notification No. 05/2017 - Compensation Cess (Rate): The notification amends the rates of compensation cess on various motor vehicles.

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

G.S.R......(E).- In exercise of the powers conferred by sub-section (2) of section 8 of the Goods and Services Tax (Compensation to States) Act, 2017 (15 of 2017), the Central Government, on the recommendations of the Council, hereby makes the following further amendments in the notification of the Government of India, in the Ministry of Finance (Department of Revenue), No.1/2017- Compensation Cess (Rate), dated the 28^th June, 2017 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 720 (E) dated the 28^th June, 2017, namely:-

2. In the said notification, in the Schedule,-

for serial numbers 47 and 48 and the entries relating thereto, the following serial numbers and entries shall be substituted, namely:-

(1)	(2)	(3)	(4)
“47	8703 40, 8703 60	Following Vehicles, with both spark-ignition internal combustion reciprocating piston engine and electric motor as motors for propulsion; Motor vehicles cleared as ambulances duly fitted with all the fitments, furniture and accessories necessary for an ambulance from the factory manufacturing such motor vehicles Three wheeled vehicles Motor vehicles of engine capacity not exceeding 1200cc and of length not exceeding 4000 mm Motor vehicles other than those mentioned at (a), (b) and (c) above.	NIL NIL NIL 15%
		Explanation.- For the purposes of this entry, the specification of the motor vehicle shall be determined as per the Motor Vehicles Act, 1988 (59 of 1988) and the rules made there under.
48	8703 50, 8703 70	Following Vehicles, with both compression-ignition internal combustion piston engine [diesel-or semi diesel] and electric motor as motors for propulsion; (a) Motor vehicles cleared as ambulances duly fitted with all the fitments, furniture and accessories necessary for an ambulance from the factory manufacturing such motor vehicles Three wheeled vehicles Motor vehicles of engine capacity not exceeding 1500 cc and of length not exceeding 4000 mm Motor vehicles other than those mentioned at (a), (b) and (c) above. E xplanation.- For the purposes of this entry, the specification of the motor vehicle shall be determined as per the Motor Vehicles Act, 1988 (59 of 1988) and the rules made there under.	NIL NIL NIL 15%”;

for serial number 52 and the entries relating thereto, the following serial numbers and entries shall be substituted, namely:-

(1)	(2)	(3)	(4)
“52	8703	Motor vehicles of engine capacity not exceeding 1500 cc	17%
52A	8703	Motor vehicles of engine capacity exceeding 1500 cc other than motor vehicles specified against entry at S. No 52B	20%
52B	8703	Motor vehicles of engine capacity exceeding 1500 cc, popularly known as Sports Utility Vehicles (SUVs) including utility vehicles. Explanation. - For the purposes of this entry, SUV includes a motor vehicle of length exceeding 4000 mm and having ground clearance of 170 mm. and above.	22%”.

(Ruchi Bisht)
Under Secretary to the
Government of India

Note: The principal notification No.1/2017-Compensation Cess (Rate), dated 28^th June, 2017 was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 720 (E), dated the 28^th June, 2017 and last amended vide 3/2017- Compensation Cess (Rate), dated 18^th July, 2017 published vide number G.S.R 892 (E) dated the 18^th July, 2017.

📚 Frequently Asked Questions (FAQs): Notification No. 05/2017 - Compensation Cess (Rate)

Q1. What is Notification No. 05/2017 - Compensation Cess (Rate)?

Answer: It is an amendment notification issued on 11 September 2017.
The notification revised Compensation Cess rates applicable to various categories of motor vehicles under GST.

Q2. What was the cess rate for vehicles up to 1500cc?

Answer: The Compensation Cess rate was 17%.
This applied to vehicles covered under revised Entry 52.

Q3. What cess applied to vehicles above 1500cc?

Answer: Generally, 20%.
However, SUVs falling under Entry 52B attracted a higher cess rate of 22%.

Q4. What was the cess rate on SUVs?

Answer: 22%.
The notification specifically created a separate entry for SUVs.

Q5. How does the notification define an SUV?

Answer: An SUV is a vehicle exceeding 4000 mm in length and having ground clearance of at least 170 mm.
Both conditions are important for classification.

Q6. Were hybrid vehicles affected?

Answer: Yes.
The notification introduced specific cess treatment for petrol-electric and diesel-electric hybrid vehicles.

Q7. Did small hybrid vehicles receive relief?

Answer: Yes.
Certain smaller hybrid vehicles attracted NIL Compensation Cess.

Q8. Were ambulances covered?

Answer: Yes.
Eligible ambulances fitted with necessary equipment attracted NIL Compensation Cess under specified entries.

Q9. Did three-wheelers receive concessional treatment?

Answer: Yes.
Specified three-wheeled hybrid vehicles were placed under NIL Compensation Cess.

Q10. Does this notification still matter today?

Answer: Yes.
It remains important for historical GST assessments, automobile sector tax analysis, and interpretation of vehicle classification rules.

Q11. Why did the Government revise the rates?

Answer: To better align vehicle taxation with policy objectives and market classifications.
The GST Council recommended these revisions after reviewing the sector.