Govt notifies GST cess hike on mid & large cars, SUVs

The government has notified levy of increased GST cess of up to 7 per cent on mid-size, large and SUV cars.

The GST Council on September 9 had decided to hike cess on mid-size cars by 2 per cent, on large cars by 5 per cent and on SUVs by 7 per cent to bring tax rates on these cars at pre-GST levels.

The Finance Ministry notified the hike in quantum of cess to be levied on cars, following which the new rates came into effect.

The effective GST rate on mid-size cars will be 45 per cent, and on large cars it would be 48 per cent.

The rate will be 50 per cent on sports utility vehicles (SUVs), which include cars with length exceeding 4,000mm and having a ground clearance of 170mm and above.

Car prices had dropped by up to Rs 3 lakh as the tax rates fixed under the Goods and Services Tax (GST) that came into effect from July 1, was lower than the combined central and state taxes in the pre-GST days.

To fix this anomaly, the council raised the cess.

(Agencies)

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