GST cess hike in cars to come in effect from September 11

Story By: Rajesh Sharma
Monday, September, 11 2017 - 15:04

The increased cess on Goods and Service Tax (GST) on mid- sized, luxury and SUV cars will come into effect from Monday, September 11. 

The cess on mid-sized cars was increased by 2 per cent, taking the effective GST rate to 45 per cent.

Meanwhile, the cess on large cars has been hiked by 5 per cent, taking the total GST incidence to 48 per cent while that of SUVs by 7 per cent to 50 per cent.

However, the cess on small petrol and diesel cars, hybrid cars and those carrying up to 13 passengers has not been hiked.“Notification regarding increase in the effective rates of the Compensation Cess on specified motor vehicles will be issued on September 11, 2017, effective from 00 hours the same day," the Central Board of Excise and Customs (CBEC) said in a statement.

The Goods and Services Tax (GST) came into effect on July 1.

Consequently, the car prices had dropped by up to Rs 3 lakh as the new tax rates fixed under the Goods and Services Tax (GST), were lower than the combined central and state taxes before GST.

To fix this anomaly, the GST Council on September 9 decided to hike the cess.


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