New Delhi, August 30: The Union Cabinet on Wednesday gave its nod to increase the cess on luxury cars and sport utility vehicles. The cess has been increased to 25 per cent from existing 15 per cent which will make cars expensive now. The new development comes in the wake of implementation of Goods and Services Tax regime.
Prices of most SUVs were cut between Rs 1.1 lakh and Rs 3 lakh following the implementation of GST. It subsumed over a dozen central and state levies like excise duty, service tax and VAT from July 1.
he GST Council 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.
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.
