SUVs, luxury cars likely to cost more as Cabinet clears cess hike ordinance

The decision has upset the growth plans of the luxury car industry

Luxury cars and sports utility vehicles are likely to cost more now with the Cabinet clearing an ordinance to increase the ceiling on cess to 25 per cent from the present 15 per cent over the peak rate of 28 per cent goods and services tax (GST) on luxury cars and sports utility vehicles (SUVs).

The ordinance will amend the Schedule to Section 8 of the GST (Compensation to States) Act, 2017, for the cess to be increased. The cess is used for compensating states that will witness less revenues under the GST regime compared to the older taxation system.

Earlier this