Cabinet approves hiking cess on luxury cars, SUVs to 25 per cent from 15 per cent
NEW DELHI: The Cabinet on Wednesday approved raising a levy on luxury cars and sports utility vehicles to 25 per cent from 15 per cent, news agency Reuters quoted a government official with knowledge of the decision.
Under the Goods and Services tax regime, all cars attract a basic GST of 28 per cent. Large cars with engine capacity greater than 1,500 cc and SUVs with length more than 4 metres & engine greater than 1,500 cc attracted additional cess of 15 per cent, but now the cess has been increased by 10 per cent.
Several car makers had reduced prices in the range of Rs 1 lakh- Rs 3.5 lakh to pass on the benefit to customers after GST kicked in on July 1. But with government's decision to revise the structure, car makers may pull these benefits off.
Under the Goods and Services tax regime, all cars attract a basic GST of 28 per cent. Large cars with engine capacity greater than 1,500 cc and SUVs with length more than 4 metres & engine greater than 1,500 cc attracted additional cess of 15 per cent, but now the cess has been increased by 10 per cent.
Several car makers had reduced prices in the range of Rs 1 lakh- Rs 3.5 lakh to pass on the benefit to customers after GST kicked in on July 1. But with government's decision to revise the structure, car makers may pull these benefits off.
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