President Kovind promulgates the ordinance to raise GST compensation cess on motor vehicles

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President Ram Nath Kovind has promulgated an ordinance to raise the compensation cess levied luxury, sports utility and large cars under the goods and services tax (GST) regime to 25% from 15%.

The union cabinet had approved recommendation of the ordinance on August 30. The GST Council, the apex decision making body for the new tax regime, will now take a call on the implementation of the higher cess as also the quantum of increase. The council that meets on September 9 would now take a call on this. 

The move is aimed at eliminating an anomaly that led to prices of such vehicles dropping after the implementation of GST, while those of smaller autos didn’t change.

The government had to opt for the ordinance route to amend the GST Compensation Cess law as parliament is not in session and the GST Council has already endorsed the amendment. 

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