Goods and Services Tax (GST) Council has, following its 21st meeting, effected some changes to the present GST (goods and services tax) structure in India. The meeting was held on 9th September 2017 at Hyderabad. Incidentally this happened to be the second review meeting following the rollout of GST. It has upped the cess applicable for items such as motor vehicles. The cess on mid-sized cars has been increased by 2%, and for large cars the rate has been upped by 5%.
Sports utility vehicles (SUVs) have had their cess increased by 7%. Initially the GST law had suggested an overall increase of 10% across the board. The overall tax incidence has been kept below 50%. This means that from now on the aggregate tax incidence on mid-sized cars would go up to 45%, SUVs would go up to 50%, and large cars would go up to 48%. Previously, it had been capped at 43% with 28% GST and 15% cess.
What had the industry said?
The industry had actually asked the authorities to effect a differential hike. It had suggested that the increase be lesser for mid-sized with the argument being that if the prices were increased in this category then it would have a detrimental effect on the middle class, the biggest buyers of such cars. In its last meeting GST Council had given its approval to an amendment in the compensation law that sought to raise the cess from 15% to 25%.
The automobile industry had meanwhile reduced prices in the high end segment after GST rolled out. As such it had opposed a widespread increase of cess. The cess rates for hybrid vehicles, small cars, and 13 seaters remain the same.
GST rates slashed
The council has also slashed GST for more than 40 items and some of them may be mentioned as below:
- walnuts
- broom
- clay idols
- custard powder
- idly-dosa batter
- rubber bands
- raincoat
- dhoop batti
- saree fall
- corduroy fabric
- computer monitors
- table and kitchenware
- prayer beads
