GST Council recommends increase in cess on motor vehicles to 25 %

Speed Post News Network

New Delhi : The GST Council considered the issue of cess leviable on motor vehicles at its 20th meeting held on August 5, 2017, and recommended that Central Government may move legislative amendments required for increasing the maximum ceiling on cess leviable on motor vehicles including SUVs to 25% instead of present 15% .

However, the decision on when to raise the actual cess leviable on the same will be taken by the GST Council in due course, according to a PIB release. It was noted that after introduction of GST, the total tax incidence on motor vehicles [GST + Compensation Cess] has come down vis-a-vis the total tax incidence in pre-GST regime.

The Schedule to the Goods and Service Tax (Compensation to State) Act 2017 specifies the maximum rate at which Goods and Service Tax Compensation Cess may be collected. In respect of motor vehicles, the maximum rate at which Goods and Service Tax Compensation Cess may be collected is 15%, according to the PIB release.