NEW DELHI, Aug 30: The Cabinet today increase the cess on mid-size, large cars and SUVs from 15 per cent to 25 per cent under the new GST regime.
With GST prices of most SUVs were cut between Rs 1.1 lakh and Rs 3 lakh which will increase in cess, the cuts will be reversed.
The GST council, the apex tax rate setting body under the Goods and Services Tax (GST) regime raised the cess with the amedment to the Schedule of section 8 of the GST (Compensation to a State) Act, 2017.
It had approved on August 5 to raise cess on SUVs, mid-sized, large and luxury cars that had become cheaper post GST rollout on July 1.
Under GST, a cess was levied on demerit goods like cars, tobacco, and coal to compensate the loss of revenue.
Cars attract the top tax rate of 28 per cent. On top of this, a cess of 1 to 15 per cent is levied for the creation of the state compensation corpus.
The date for implementing the hike in the upper limit of the cess from 15% to 25% will be decided by the GST Council when it meets in Hyderabad on September 9.
Presently, large motor vehicles, SUVs, mid-segment cars, large cars, hybrid cars and hybrid motor vehicles attract a cess of 15 per cent over the 28 per cent GST rate.
Small petrol cars of less than 4 meters and 1,200 cc attract a cess of 1 per cent, while small diesel cars of less than 4 meters and 1,500 cc engine attract a cess of 3 percent.
GST present slab and upcoming slab rate on cars:-
|Existing GST Rates||Rate||Classification|
|Petrol Cars with Engine < 1.2 Litre||28% + 1% Cess||Petrol Cars for Mass Market|
|Diesel Cars with Engine < 1.5 Litre||28% + 3% Cess||Diesel Cars for Mass Market|
|All other Cars||28% + 15% Cess||All other Cars|
|GST Rates post New Development||Rate||Classification|
|Compact Petrol Cars with Engine < 1.2 Litre||28% + 1% Cess||Compact Petrol Cars under 4 Meter|
|Compact Diesel Cars with Engine < 1.5 Litre||28% + 3% Cess||Compact Diesel cars with Length < 4 Meter|
|Mid Segment Cars with Engine < 1.5 Litre||28% + 25% Cess||Cars with Length > 4 Meter|
Based on Existing Slabs, expected Category
GST Impact after increase in 10% Cess
|Maruti Baleno, Honda Jazz, WRV, I20, Ford Ecosport, Maruti Brezza or Segment lower cars etc||No Price Hike|
|Honda City, Hyundai Verna, Maruti Ciaz, Renault Duster, Nissan Terrano etc||Rs 70K to Rs 1 Lakh|
|Mahindra XUV 500, Tata Hexa, Tata Safari Storme, Toyota Innova Crysta, Skoda Octavia, Toyota Corolla, Jeep Compass||Rs 90K to Rs 1.5 Lakh|
|Toyota Fortuner, Ford Endevaour, Skoda Superb, VW Tiguan||Rs 2 Lakh to Rs 2.5 Lakh|
|Audi Q3, A4, A6, BMW X1, 3 Series, GT, Benz C, E, GLE, GLA Class||Rs 2.5 Lakh to Rs 4 Lakh|