The newly elected President of India, Ram Nath Kovind, has recently in an official announcement ordered to increase the GST compensation cess rate on luxury vehicles, large cars and sports utility cars from 15% to 25% under the GST regime. This is the first time when the President, ever since he has been elected to this position earlier this year, has officially passed a GST related order among the public.
Prior to this, the Union cabinet had already approved the increased cess ordinance in a meeting held on 30th August. Now, it is up to the GST Council to take the final call and make this official. The council is probably going to take the final call on this in its upcoming meeting on September 9.
Although all the official amendments and laws are made by the parliament session during its session, but since parliament is not in session presently, the government took the ordinance route to apply the GST Compensation Cess amendment which has already been endorsed by the GST Council.
As per the reports, an anomaly was created which led to drop in prices of the premium and luxury vehicles while those of small vehicles remained constant, following the launch of GST in India. The new cess law is aimed at removing such anomaly and creating a constant auto market.
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Since the President Kovind took the liberty to announcing the ordinance himself, it is clearly an important GST law for the auto industry. This also indicates that we might see more of the President with more announcements in the coming future.