Cabinet approves Ordinance to Amend GST Act

New Delhi, Aug 30: An important decision was taken today. The Union Cabinet chaired by Prime Minister Narendra Modi today has cleared the promulgation of an Ordinance to increase the cess on mid-size, large cars and SUVs from the current 15 per cent under the new GST regime.

Finance Minister Arun Jaitley has briefed the media and has said that the cabinet has approved the GST Council suggestion on August 5 to Amend the GST (Compensation to a State) Act, 2017.

He has said that council has taken this decision because the total tax rates on few luxury cars and SUV has come down under the new tax regime.

Minister has also said that the Final tax rates with the increased cess would be decided by the Goods and services tax Council. the next meeting of the council would be held in Hyderabad on September 9.

FM has hinted that the prices of some luxury cars and Sport Utility vehicles may go up with the increased tax rates. Earlier the Tax on these items would be in the range of 52-55 %. However, the tax rates were reduced to 43 % Including cess on the cars.

The GST Council has detected the anomaly and has suggested amending the GST act to increase the cess so that higher taxes can be levied. The prices of high-end luxury cars and SUV have reduced because of lower tax rates under the new tax regime which were rolled out from July 1.