The Government, with a view to increase Goods and services Tax (GST) Cess on luxury cars and SUVs, may promulgate an ordinance, said reports.
The said move seeks to restore tax revenue from the automobile industry that unintentionally got affected in the transition to the new indirect tax regime.
Reportedly, a cabinet note is being moved proposing changes to the schedule of cess levied under the GST (Compensation to States) Act, 2017, to correct the reduction in tax burden on cars due to GST rollout.
The GST Council, however, has taken the view that tax rate revisions during the transition to the new indirect tax system that kicked in from 1 July will be limited only to correcting unintentional effects of the tax rate fixing exercise.
Earlier, the GST Council had recommended to the central government to move legislative amendments needed for raising the maximum ceiling of cess that can be levied on motor vehicles including sports utility vehicles (SUVs) to 25% from the present 15%.
The move to issue an ordinance suggests the urgency with which the government would like to bring into effect an increase in the cess.
The Council will also consider at its next meeting, on 9 September in Hyderabad, any other issue coming up from the experience of GST payment and filing of returns, as well as suggestions coming up during the meeting of chief commissioners of Central Board of Excise and Customs (CBEC) in the first week of September.
