Cess on Luxury cars,SUVs increased

New Delhi Aug 7: An important decision was taken recently.
The GST Council in its 20 meeting held on Saturday has decided to increase the cess levied on SUVs, mid-sized, large and luxury cars from 15 % to 25 %. Currently, these vehicles become cheaper after the council has earlier fixed a cess of 15 % over 28 % tax and the total tax rate was 43%.

Before GST the tax rate on these vehicles was close to 55 %. Sources said that the council has identified this anomaly and has rectified it similar to the case of cigarettes were the cess was increased after the companies were gaining huge profits.

The finance ministry has said that GST Council has suggested some legislative amendments so that compensation cess can be increased because currently the cess is capped at 20 % above the tax rate.

Sources say that this decision would help the government in following ways
* revenue to the government would increase
* To project as a pro poor people measure because of high tax rates on luxury items.

Let's hope that government soon amends the law so that transition is smooth.