The Central Board of Excise and Customs (CBEC), on Wednesday notified the increased rate of cess on Motor Vehicles.
Earlier, the 21st meeting of the GST Council on September 9th had decided to hike cess on mid-sized cars by 2 percent, taking the effective GST rate to 45 percent. Also, cess on large cars has been hiked by 5 per cent, taking the total GST incidence to 48 percent while that of SUVs by 7 percent to 50 percent.
After the GST Council meet on September 9, Finance Minister Arun Jaitley had said that in large vehicles where affordability of consumers is high, the cess has been increased. “The pre-GST rate has not been restored… Even though we had a headspace of hiking cess by 10 per cent, it has been hiked by up to 7 per cent,” Jaitley had said.
Cess on small petrol and diesel cars, hybrid cars and those carrying up to 13 passengers has not been hiked. Post rollout of GST, Car prices had dropped by up to Rs 3 lakh which were lower than the combined central and state taxes in pre-GST days. The Council raised the cess in order to fix this anomaly Under the GST regime, cars attract the highest tax slab of 28 percent and on top of that, a cess is levied. An ordinance was promulgated last week to hike the cess from 15 percent to up to 25 per cent.
Read the full text of the Notification below.
