New Delhi (ABC Live): GST Act Amendment ; The Union Cabinet chaired by Prime Minister Shri Narendra Modi has given its approval to the proposal of the Finance Ministry to promulgate an ordinance to suitably amend the Goods and Services Tax (Compensation to States) Act, 2017.
The approval would allow to increase the maximum rate at which the Compensation Cess can be levied from 15% to 25% on:
- a) motor vehicles for transport of not more than thirteen persons, including the driver [falling under sub-headings 870210, 8702 20, 8702 30 or 8702 90]; and
- b) motor vehicles falling under headings 8703.
The GST Council, in its meeting held in August 2017, taking into consideration the fact that post introduction of GST, the total incidence on motor vehicles [GST+ Compensation Cess] has come down vis-a-vis pre-GST total tax, incidence, and had recommended increase in the maximum rate at which Compensation Cess can be levied on motor vehicles falling under headings 8702 and 8703 from 15% to 25%.
The issue regarding the increase in effective rate of Compensation Cess on motor vehicles will be examined by the GST Council in due course.
Goods and Services Tax (GST) is an indirect tax which was introduced in India on 1 July 2017 and was applicable throughout India which replaced multiple cascading taxes levied by the central and state governments.
It was introduced as The Constitution (One Hundred and First Amendment) Act 2017,following the passage of Constitution 122nd Amendment Bill. The GST is governed by a GST Council and its Chairman is the Finance Minister of India. Under GST, goods and services are taxed at the following rates, 0%, 5%, 12% ,18% and 28%.
There is a special rate of 0.25% on rough precious and semi-precious stones and 3% on gold. In addition a cess of 15% or other rates on top of 28% GST applies on few items like aerated drinks, luxury cars and tobacco products.[
GST was initially proposed to replace a slew of indirect taxes with a unified tax and was therefore set to dramatically reshape the country’s 2 trillion dollar economy.
The rate of GST in India is between double to four times that levied in other countries like Singapore.