It’s one radical shift that has made the country anxious, confused and excited at the same time. Yes, we are talking about the GST, which stands for Goods and Services Tax. Ever since its rollout, business enterprises and common man have tried to decode the new indirect tax regime in their own way.
But most have failed to decipher it in the true sense. Call it the complexity or other reasons, the GST tax has even pushed the state governments on the backfoot. And due to the confusion surrounding the GST, a meeting took place between the Union Finance Ministry and the State Government officials on September 9, 2017.
Deliberations were made on car cess to other strategies to ensure the states do not lose out on the revenue. And so, the GST meet came out with some decisions which you can know in this article.
Hike in Car Cess
The GST Council, in its meeting, has decided to hike the cess on cars by upto 7%. Mid-size, large and SUVs now attract an additional cess of 2%, 5% and 7%, respectively. However, there is no hike in the case of small and hybrid cars.
With the increase in cess, the mid-size cars would now attract a tax rate of 45%. On the other hand, large-size cars and sports utility vehicles (SUVs) would now be taxed at 48% and 50%, respectively. With regards to the SUVs, the amended tax rate will be applicable to cars with a length of more than 4,000mm and a ground clearance of 170mm and more. The increase in cess has somewhat taken the taxes rates on these cars to the pre-GST levels.
The decision came in the backdrop of the promulgation of the ordinance last week to hike the cess from 15% to 25%. The tax structure GST on cars is 28% GST + Additional Cess.
Car Prices Firm Up
Honda Cars India, following the increase in the cess, have announced a hike in the prices of its City, CR-V and BR-V models in the range of ₹7,003-89,069. Joining the bandwagon, the Japanese automaker Toyota Kirloskar Motor has increased the prices of Innova Crysta, Corolla, Etios and Fortuner models by ₹13,000-1,60,000. Don’t be surprised if other carmakers follow the suit.
Branded Foods Can’t Escape GST
In the aftermath of many food businesses deregistering the brands to avoid GST, the government has come out with a clarification to impose 5% tax on any businesses registered on May 15, 2017. So, even if they deregister later, they are going to be taxed at 5%.
Rates Slashed for 40+ Items
The GST Council has decided to slash the tax rates of more than 40 items – walnut, custard powder, saree fall, clay idols, raincoat, corduroy fabric, idli dosa batter, table, kitchenware and others. On the other hand, the GST levy is not applicable to the khadi sold at KVIC outlets, revealed the government.
Deadline of GST Return Filing Extended
The council decided to extend the date of GSTR1 filing to October 3 and October 10 from the earlier date of September 10. Now, small businesses can file the return by as late as October 10, while the large ones would have to do by October 3. Meanwhile, the council has also extended the date of GSTR 2 and GTR3 filing for July to October October 31 and November 10, respectively.
So, these are the changes the GST Council has brought to ensure the new indirect tax is effective and bring a positive change in India’s economy. There can be further changes to GST tax in the times to come.