Engine capacity, expressed as cubic centimeters (CC), is the standard measure for engine size when discussing cars, motorcycles, and scooters. It appears everywhere, from advertisements to dealerships. But why is engine capacity always measured in CC? What does CC represent, and how does it affect the Goods and Services Tax (GST) rates?
CC stands for cubic centimeter, which is a measurement of the volume within an engine’s cylinder where fuel and air mix and combust to produce power. In simple terms, a higher CC means a larger engine that can accommodate more fuel and air, resulting in greater power. A 100cc scooter is ideal for short commutes and provides good mileage. A 350cc motorcycle is more powerful, designed for longer trips and better highway performance. Cars often have engines ranging from 1000cc to 2000cc.
There is a direct relationship between CC and liters. An engine with 1000cc is equivalent to 1 liter. CC and liters both measure volume; 1 liter equals 1000 cubic centimeters (1000cc). The engine size represents the volume where the fuel and air mixture combusts to generate power. Automakers and consumers often use rounded figures for simplicity. For example, a 1197cc engine might be referred to as a 1.2-liter engine, and a 1498cc engine as a 1.5-liter engine. Liters are more easily understood by the general public internationally, while CC is a more technical term. Since cars and large bikes often have engine capacities above 1000cc, it’s easier to use liters. Smaller bikes and scooters typically use CC, such as 100cc, 150cc, or 350cc.
The government incorporates CC for GST calculations to simplify the tax structure and regulate vehicle prices. Cars with larger engines typically consume more fuel and cost more. The government decided to tax smaller-engined vehicles less and larger-engined vehicles more.
The recent GST 2.0 framework follows this system. Motorcycles with engines under 350cc have an 18% GST rate, making them more accessible to consumers. Larger bikes with engines over 350cc are subject to a 40% tax. Cars with engines up to 1.2 liters (petrol) and 1.5 liters (diesel) benefit from lower tax rates, which helps keep hatchbacks and sub-compact cars affordable. Luxury cars and SUVs with engines above 1500cc face a 40% GST.
