From last few months, the government is working upon to hike the cess on luxury vehicles from 15 percent to 25 percent and now finally, a bill has been approved by the Lok Sabha which has made the cess on luxury cars at 25%. The new move implemented by the government will help to recover the state revenue loss which has engulfed after the implementation of the Goods and Services Tax (GST) Regime.
The GST (Compensation to States) Amendment Bill, 2017 had been passed by the lower house, after so many controversial issues raised by the Union Minister Anant Kumar Hegde on secularism and the Constitution.
It seems that the new bill replaces the regulation that was passed in the month of September to implement the actual effect to the decision of the GST Council. The new regulations implemented by the government hike in GST cess on luxury cars range from mid-size to hybrid variants and the luxury ones to 25%.
Finance Minister Arun Jaitley said that funds those received from the hike in cess on luxury vehicles will be utilized to compensate the states revenue loss due to the implementation of Goods and Services Tax (GST) Regime. He further added that GST Council which comprises several state finance minister will meet every month and would make strategies for revenue distribution.
While participating in the discussion, some of the members have been demanding that tax rates under GST should be reduced on several items such agriculture equipment, sanitary napkins, handicrafts, handloom items and sports goods. Some of the members also advised that there must be single slab rate rather than four under GST.
