Cess on luxury cars hiked; 30 daily-use items cheaper under GST

Hyderabad
10 Sep 2017

Mid-sized and luxury cars as also SUVs will cost more after the GST Council on Friday decided to levy an additional 2 to 7 per cent cess on them but exempted small and hybrid cars from any hike.
The council also lowered the Goods and Services Tax (GST) rates for a number of daily-use products ranging from idli/dosa batter to kitchen gas lighter.
A 2 per cent additional cess will be levied on mid-sized cars, 5 per cent on large cars and 7 per cent on SUVs, taking the total incidence of taxation to pre-GST levels, Finance Minister Arun Jaitley said after an 8-hour long meeting of the panel here.
The council, headed by Jaitley, however, decided not to levy any additional tax on small petrol and diesel cars of up to 1200 cc as well as on hybrid ones.
The date of implementation of the additional cess will be notified later.
"Small petrol and diesel cars enjoyed a tax advantage of 3 per cent post GST. But status quo will be maintained on small petrol diesel cars, so even if it has got cheaper let consumers enjoy the benefit," Jaitley said.
Tax on mid segment cars had gone down from 48 per cent to 43 per cent and the council today decided to increase cess by 2 per cent to 45 per cent, he said.
Large cars got an advantage of 8 per cent, but the council hiked cess today by 5 per cent, he said adding SUVs got benefit of 11 per cent post GST, but cess is being hiked by only 7 per cent.
"Cess on cars with seating capacity above 10 but up to 13 as well as hybrid cars will remain unchanged," he said.
The council, he said, decided that in large vehicles where affordability of consumers is high, the pre-GST rate has not been restored.
"Even though we had a headspace of hiking cess by 10 per cent, it has been hiked by 7 per cent," the finance minister said.
Jaitley said GST on about 30 items have been lowered after anomalies in the fixation of rates were pointed out.
To deal with businesses which are deregistering brands post GST to avoid taxes, the panel decided May 15, 2017 as the cut-off date for considering as a registered brand for the purpose of GST levy, irrespective of whether or not the brand is subsequently deregistered.
Unbranded food items are exempted from the GST, whereas branded and packaged food items attract 5 per cent rate. Hence, many businesses are deregistering their brands to avoid the levy. (PTI)