The Goods and Services Tax Council on Saturday raised the cess on motor vehicles--mid-size cars, large cars and sports utility vehicles by 2%, 5% and 7% respectively instead of whole 10% increase effected in the law, while keeping the overall tax incidence within 50%. This increase in cess rate would take the overall tax incidence on mid size cars to 45%, large cars to 48% and SUVs to 50% from 43%( 28% GST+ 15% cess) now. Industry had pitched for differential hike --lower increase for mid-sized cars arguing that this price increase in this segment would impact middle class.The #GST Council had at its last meeting approved a proposal for an amendment in the compensation law to raise the cess to 25% from 15%.
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