Skip to main content

Govt all set to hike GST cess on luxury cars, via ordinance

By
Govt all set to hike GST cess on luxury cars, via ordinance
The ordinance will allow the government to hike GST cess on luxury cars and SUVs to restore tax revenue from the auto industry
The government is set to promulgate an ordinance within weeks, allowing an increase in goods and services tax (GST) cess on luxury cars and SUVs, as it seeks to restore tax revenue from the automobile industry that unintentionally got affected in the transition to the new indirect tax regime.
A person aware of the discussions in the finance ministry said on condition of anonymity that 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.
The finance ministry on 7 August said the Council chaired by finance minister Arun Jaitley 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.
“Only after the ordinance has been passed, the Council can decide what should be the quantum of increase needed. The outer limit suggested is 25%,” said the person.
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.
Makers of SUVs and luxury cars have criticized the GST Council’s plan to raise the cess, warning the move will lead to production cuts and job losses and dent the 
“Make in India” initiative. “Businesses have to realize one thing. The Council’s effort was to keep tax rate fixation as revenue neutral as possible. This (reduced tax burden on cars) is an unintended mistake that needs to be corrected. Where the reduction is intentional, there is no rate revision,” said the person cited above, adding that the Council consciously kept GST rates lower on many items so that the common man benefits from the new tax system.
“We need to accept, while introducing a major tax reform like GST, there would be cases where GST rates could be more or less than erstwhile taxes in a few cases and if it is so due to a process of rationalization, we need to leave them as it is,” suggested R. Muralidharan, senior director, Deloitte India.
The Hindustan Times, New Delhi, 21st August 2017

Comments

Post a Comment

Popular posts from this blog

Credit card spending growth declines on RBI gaze, stress build-up

By
  Credit card spends have further slowed down to 16.6 per cent in the current financial year (FY25), following the Reserve Bank of India’s tightening of unsecured lending norms and rising delinquencies, and increased stress in the portfolio.Typically, during the festival season (September–December), credit card spends peak as several credit card-issuing banks offer discounts and cashbacks on e-commerce and other platforms. This is a reversal of trend in the past three financial years stretching to FY21 due to RBI’s restrictions.In the previous financial year (FY24), credit card spends rose by 27.8 per cent, but were low compared to FY23 which surged by 47.5 per cent. In FY22, the spending increased 54.1 per cent, according to data compiled by Macquarie Research.ICICI Bank recorded 4.4 per cent gross credit losses in its FY24 credit card portfolio as against 3.2 per cent year-on-year. SBI Cards’ credit losses in the segment stood at 7.4 per cent in FY24 and 6.2 per cent in FY23, the...
Post a Comment
Read more

SFBs should be vigilant, proactive to mitigate risks: RBI deputy guv

By
  The Reserve Bank of India’s Deputy Governor Swaminathan J on Friday instructed the directors of small finance banks (SFBs) to be vigilant and proactive in identifying emerging risks in the sector.Speaking at a conference for directors on the boards of SFBs, Swaminathan highlighted the role of governance in guiding SFBs towards sustainable growth with stability. He also emphasised the importance of sustainable business models.Additionally, he highlighted the need for strengthening cybersecurity to protect the entities against digital threats and urged for a stronger focus on financial inclusion, customer service, and grievance redressal to ensure a broader reach of banking services.Executive Directors S C Murmu, Rohit Jain, and R L K Rao, along with other senior officials representing the Supervision, Regulation, and Enforcement Departments of the RBI, also participated in the conference.   -  Business Standard  30 th  September, 2024
Post a Comment
Read more

Brigade Hotel Ventures files draft papers with Sebi for Rs 900 crore IPO

By
  Brigade Hotel Ventures Ltd, owner and developer of hotels in South India, has filed draft papers with capital markets regulator Sebi to raise Rs 900 crore through an initial public offering (IPO).The proposed IPO is entirely a fresh issue of equity shares with no Offer-for-Sale (OFS) component, according to the draft red herring prospectus (DRHP).Proceeds from the issue to the tune of Rs 481 crore will go towards payment of debt, Rs 412 crore will be allocated to the company and Rs 69 crore to its material subsidiary, SRP Prosperita Hotel Ventures Ltd.Additionally, Rs 107.52 crore will be used to purchase an undivided share of land from the Promoter, BEL, and the remaining funds will support acquisitions, other strategic initiatives, and general corporate purposes.The company may raise up to Rs 180 crore through a Pre-IPO Placement.   If the placement is undertaken, the issue size will be reduced.Brigade Hotel Ventures Ltd is a wholly-owned subsidiary of Brigade Enterprises ...
Post a Comment
Read more