GSTAT Bengaluru held Hyundai Creta, Tucson and Alcazar variants attracted 20% cess before 26 Jul 2023, relying on ARAI laden figures over foreign website data and Circular No. 247/04/2025-GST.

GSTAT Bengaluru has held that, for supplies before 26 Jul 2023, the ground clearance condition in Entry 52B of Notification No. 01/2017-Compensation Cess (Rate) is measured with the vehicle laden, so SUVs with laden clearance below 170 mm attracted cess at 20%, not 22%. [Advaith Motors Private Limited v. Commissioner of Central GST, Bengaluru South Commissionerate, 2026-juristway.com-3176-GSTAT(Bengaluru)-GST]

The Bench of Prabhakaran P.M., Judicial Member, and Ravi Jesuraj S., Technical Member (State), set aside a demand of ₹9,76,21,566 with interest and a penalty of ₹97,62,157 against a Hyundai dealer for 11 Sep 2017 to 31 Jul 2023.

The Department accepted that the Creta 1.6L, Tucson 2.0L and Alcazar 2.0L met the engine, length and “popularly known as SUV” conditions. On clearance, it relied on unladen figures from Hyundai South Africa’s website and Indian portals, treating the July 2023 Explanation specifying unladen measurement as clarificatory. The ARAI certificates showed laden clearance of 165 mm, 135 mm and 154 mm.

The Bench held that ground clearance, undefined before July 2023, takes its technical meaning under IS 9435, which measures it on a fully laden vehicle. Notification No. 03/2023 substituted and widened the whole entry, so it imposed a new burden and was prospective under Commissioner of Income Tax v. Vatika Township (P) Ltd. ((2015) 1 SCC 1). Circular No. 247/04/2025-GST, which binds the Department, applies the amendment from 26 Jul 2023, as did Mercedes-Benz India Pvt. Ltd. v. Union of India (2025 (5) TMI 552) and Popular Motor World Pvt. Ltd. v. Union of India (2025 SCC OnLine Ker 4864).

The burden of proof lay on the Revenue. Figures for vehicles built for another market could not prevail over statutory certificates for the models sold in India, and the Revenue had not summoned HMIL or ARAI under Section 70. The Bench also found that the notice’s figures did not reconcile.

It rejected the dealer’s plea that it could simply follow the manufacturer’s rate, holding that a dealer must self-assess its own supply under Section 59. Supplies from 26 Jul 2023 fell under the new entry, but the Revenue had neither separated nor quantified them.

2026-juristway.com-3176-GSTAT(Bengaluru)-GST