25% GST On Luxury Cars

Luxury vehicles to cost more! Cess on luxury vehicles increased to 25% from its earlier 15% after a bill was passed in Lok Sabha to the effect on Wednesday. The GST (Compensation to States) Amendment Bill, 2017 was approved notwithstanding the chaos that prevailed over the provocative comments made by Union Minister, Anant Kumar Hegde on the Constitution and secularism. The comments led Opposition to enforce four adjournments in the course of the day. Parliamentary Affairs Minister, Anant Kumar tried to escape from the situation by insisting that Hegde’s comments were twisted. Kumar’s intervention failed to quell the chaos and bring quiet during the discussion.

25% GST On Luxury Cars

The Ordinance, which provided for an increase in GST cess on varied cars including the luxury makes to 25%, shall be replaced by the Bill. Finance Minister, Arun Jaitley disclosed that funds collected subsequent to the cess hike on luxury vehicles will be utilized for compensating states for loss of revenue due to GST implementation. He revealed that a meeting of the GST Council comprising of state finance ministers is held every month to decide on tax rationalizations considering the revenues collected. A BJD member, Bhartruhari Mahtab indicated that GST roll out impact on revenues will be apparent only post January after the new indirect tax regime is well in place. Several suggestions were forwarded by members as they took part in the discussions and most of them related to reduction in GST rates for varied items like agriculture equipment, sanitary napkins, handloom items, handicrafts, and sports goods. Suggestions for replacing four tax slabs by a single slab were also forwarded by some.

The past three months saw the Centre providing compensation amounts of Rs 2,000 crore to West Bengal and Rs 1,000 crore to Odisha. Kaushalendra Kumar (JDU), T G Venkatesh Babu (AIADMK), Prem Singh Chandumajhra (SAD) asked for special packages for their states of Bihar, Tamil Nadu and Punjab respectively. Other participating ministers included C M Jayadevan (CPI), Supriya Sule (NCP), Dushyant Chautala (INLD), and Bhagwant Mann(AAP).

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