Govt pushes bill in LS to replace GST cess hike ordinance

Govt pushes bill in LS to replace GST cess hike ordinance

The government on Friday introduced a Bill in the Lok Sabha to replace the recent GST cess hike ordinance on certain motor vehicles. The bill was introduced by Finance Minister Arun Jaitley.

The government had promulgated an ordinance in September, this year, after the GST Council recommended an increase of 10% in compensation cess on motor vehicles falling under heading 8702 and 8703 of the Customs Tariff Act.

A range of cars from hybrid versions to mid-sized, to luxury ones, fell under that category. Before that the maximum tariff on such vehicles were 15%.

The government promulgated the Goods and Services Tax (Compensation to States) Amendment Ordinance 2017 on September 2, hiking the cess to 25%.

"In this regard, the maximum rates were to be increased immediately by amending the GST (Compensation to States) Act, 2017, before the next meeting of the GST Council that was scheduled for September 9. This was to ensure that the "cushion in maximum rate for compensation cess for such motor vehicles was available at the said meeting", the statement of object and reasons of the bill said.

It said the Act was enacted with a view to provide for compensation to the states for loss of revenue arising on account of implementation of the GST.

Last week, the Cabinet had cleared the bill to replace the ordinance.

 

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