GST: Cess hike on cars to take effect from Monday

New Delhi: The increased Goods and Services Tax (GST) cess on mid- and high-segment cars approved by the GST Council will come into effect from Monday.

"Notification regarding increase in the effective rates of the Compensation Cess on specified motor vehicles will be issued on September 11, 2017, effective from 00:00 hours the same day," the Central Board of Excise and Customs (CBEC) said in a tweet.

Following the 21st meeting of the GST council at Hyderabad on Saturday, Finance Minister Arun Jaitley announced that while status quo has been maintained for small cars (petrol and diesel), hybrid cars and 13-seater vehicles, the Council decided to increase the cess rates for some segments.

GST cess on mid-segment cars has been increased by 2 per cent, for large segment cars it has been increased by 5 per cent and for SUVs by 7 per cent, he said.

He said that in large vehicles where affordability of consumers is high, the cess has been increased.

"The pre-GST rate has not been restored... Even though we had a headspace of hiking cess by 10 per cent, it has been hiked by up to 7 per cent," he said.

Under the new indirect tax regime, cars attract the highest tax rate of 28 per cent, while a cess is levied on top of GST.

The government promulgated an ordinance last week increasing the cess from 15 per cent to up to 25 per cent.