Service utility cars(SUVs) and luxury cars that had become cheaper after the roll out of GST on July 1 are set to cost more.
The union cabinet on Wednesday approved an ordinance for raising GST(goods and service tax) cess on luxury cars and SUV’s (sport utility vehicles) to 25% from 15%.
Luxury cars and SUV’s car makers reduced prices in the range of Rs.1 Lakh -Rs.3.5 Lakh to pass on the benefits to customers after GST kicked in on july 1 this year.Toyoto’s fortuner had turned cheaper by Rs 2.17 lakhs and the Innova by Rs 1 lakh. Most luxury cars had also turned cheaper by as much as 8-10 per cent in many states.
vehicles in the category
Under GST regime, call cars attract a basic GST of 28%.
Motor vehicles which can carry more than 10 people but less than 13, large cars with engine capacity greater than 1500cc and SUVs with length more than 4 meters and engine greater than 1500cc attracted additional cess of 15%, but now the cess has been increased by 10%.
The GST council may in its next meeting on 9th September in Hyderabad decide the date when the increased cess will be applicable on luxury cars and SUVs.
The cess collected from cars,coal and tobacco will be used to compensate the revenue loss of states by implementing GST.