Centre mulls raising GST ceiling beyond 40% on SUVs, luxury, sin goods
The Centre is planning to continue with two of the four GST slabs. From the existing GST brackets--5%, 12%, 18% and 28%, the panel is planning to only 5 and 18% only.
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The Centre is reportedly planning to increase the Goods and Services Tax (GST) ceiling on several items beyond 40%. According to a report by Business Line, items such as SUVs, luxury, and sin goods may attract GSR above 40% in the upcoming GST Council meeting, scheduled for 3 and 4 December.
At present, SUVs fall under 28% GST along with a compensation cess of 15-22%, pushing the levy to 43-50%. Legally, Section 9(1) of the CGST Act, 2017, caps the maximum GST rate at 40%. An official said that compensation cess is levied under a separate law, but cess in general is non-shareable under the Constitution.
Recently, Prime Minister Narendra Modi announced about the GST reforms, with a cut in the GST rate cuts.
The Centre is planning to continue with two of the four GST slabs. From the existing GST brackets--5%, 12%, 18% and 28%, the panel is planning to only 5 and 18% only.
However, Uttar Pradesh Finance Minister Suresh Kumar Khanna recommended a provision for a 40% tax rate on items classified as ultra luxury and sin goods. Additionally, West Bengal's Finance Minister Chandrima Bhattacharya also suggested an additional levy above 40% the GST rate to sustain current tax levels on ultra luxury items.
Meanwhile, the automobile industry has urged the Centre to expedite the implementation of new GST rates to avoid the negative impact of the festive season.
According to a report by CNBC TV-18, auto companies pushed the government to implement new GST rates to coincide with the Navratri period on 22 September.
