NEW DELHI: The Cabinet meeting tomorrow is likely to consider issuing ordinance to increase the cess on mid-size, large cars and SUVs to 25 per cent from 15 per cent under the new GST regime.
Prices of most SUVs were cut between Rs 1.1 lakh and Rs 3 lakh following the implementation of GST, which subsumed over a dozen central and state levies like excise duty, service tax, and VAT from July 1.
With the increase in cess, the cuts will be reversed.
“The ordinance is listed for consideration of the cabinet tomorrow,” an official said here.
The GST Council, the apex tax rate setting body under the Goods and Services Tax (GST) regime, had on August 5 approved raising cess on SUVs, mid-sized, large and luxury cars that had become cheaper post GST rollout on July 1.
But raising the cess requires an amendment to the Schedule of section 8 of the GST (Compensation to a State) Act, 2017.
An ordinance is issued when Parliament is not in session to approve a legislation or change in a legislation. It has to be replaced with a proper legislation with the approval of Parliament within six months of its issuance.
Under GST, a cess was levied on demerit goods like cars, tobacco, and coal to create a corpus for compensating states for any loss of revenue from their taxes like VAT being unified with central levies like excise duty and service tax in the GST. (AGENCIES)
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