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Cabinet approves ordinance to increase cess on vehicles under GST

Cabinet approves ordinance to increase cess on vehicles under GST

"We will have to break up the figures to see if any State has not got (adequate) revenues and the Cess will compensate them".

Raising the levy will make luxury cars and SUVs more expensive and could hurt sales of companies like Mercedes-Benz, BMW, Volvo and Jaguar Land Rover, owned by Tata Motors.

Information gathered from the commercial tax department reveals that only 7,500 out of over 25,000 taxpayers registered on the GST network have paid the tax revealing a success rate of 30 per cent. For example, small petrol cars which did not exceed 4 metres in length used to be levied 31.4% tax before implementation of GST.

The GST Council is likely to decide the date of implementation of the increased cess during its next meeting on September 9, PTI reported.

Of the IGST collection, Rs20,964 crore have been on account of imports, he said, adding that Rs7,198 crore have come in from cess imposed on demerit goods.

Mid-size cars, luxury cars, and SUVs which had witnessed lower taxation since the roll-out of Goods and Services Tax (GST) will now return close to their pre-GST rates.

Post-GST, prices of the vehicles in the above-mentioned categories were reduced by automakers in the range of Rs 1.1-3 lakh.

The finance ministry had earlier said that after introduction of GST, the total tax on motor vehicles (GST plus compensation cess) came down as compared to the total incidence in pre-GST regime.

"Now, with this proposed measure, the luxury auto industry is going to decelerate". "What is critical to the industry is when, how much and on what criteria will the cess be increased", said Pawan Goenka, managing director, M&M. "If at all it was required, a review could have been taken after six months when the outcome of GST regime would have been clearer", he added.

TS Contributes 5 Percent To Countrys GST Kitty TS Contributes 5% To Country's GST Kitty: While the deadline to file first tax returns under the new tax regime ended on Monday, almost five percent has been contributed by the Telangana State to the country's Goods and Services Tax (GST) kitty. Presently, large motor vehicles, SUVs, mid-segment cars, large cars, hybrid cars and hybrid motor vehicles attract a cess of 15 per cent on top of 28 per cent GST.



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