GST Council decides to levy uniform taxation for utility vehicles

NEW DELHI (Reuters) - India's Goods and Services Tax (GST) Council said that uniform taxation would be levied on multi utility vehicles and sports utility vehicles, according to a statement.

The body, chaired by India's Finance Minister Nirmala Sitharaman and comprised of state finance ministers, decided all large cars, by whatever name they are called, will attract 22% cess, which is an additional tax imposed over and above GST. The cess tax will be on top of a 28% tax if their length exceeds 4000 mm, have engine capacity of over 1500 cc, and have ground clearance of 170 mm.

However, there is ambiguity whether a cess of 20% or 22% should be imposed on multi utility vehicles.

The GST Council also said in the statement that the sale of food and beverages in multiplexes should attract 5% tax and not 18%, to ensure uniformity in tax rates across Indian states.

The clarification was sought by industry bodies and multiplex operators who were being asked to charge 18% by some states. The GST Council, however, said movie tickets and food items bundled and sold will attract 18% tax.

To manage disputes related to GST, appellate tribunals will be set up in phases. "Our effort and estimate is to make GST tribunal operational in 4-6 months," said Revenue Secretary Sanjay Malhotra at a press briefing.

The creation of GST Appellate will help in the resolution of a multitude of litigations pending under GST, said Abhishek Jain, a partner at KPMG.

The GST Council also decided to provide tax exemptions to satellite launch services provided by private companies.

It also decided to impose a 28% tax on funds that online gaming companies collect from their customers.

 

(Reporting by Nikunj Ohri and Sarita Singh; Editing by Chris Reese)