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GST Council caps cess on demerit goods at 15 pc

Press Trust of India  |  New Delhi 

A maximum of 15 per cent cess on top of the peak rate of 28 per cent will be levied on luxury goods and aerated drinks after the Council today approved a cap on cess along with supporting legislations.

The actual cess on demerit goods, which will help create a corpus for compensating states for any loss of from implementation in the first five years, may be lower than the cap as the Council has kept a "little" headroom for future exigencies, Minister said.

Giving an example, he said if a luxury car at present commands a total of 40 per cent, under the new indirect regime, a of 28 per cent plus 12 per cent cess would be levied to keep the incidence at the same level.

The 15 per cent cess cap would apply on luxury cars and aerated drinks. On pan masala, the cess has been capped at 135 per cent ad valorem.

Tobacco cess will be capped at a mixture of Rs 4,170 per 1,000 sticks or ad valorem of 290 per cent. Cess on coal would be at Rs 400 per ton. No decision has been taken to levy cess on bidis as of now, an official said.

The panel today also cleared the State-(S-GST) and Union Territory (UT-GST) legislations, Jaitley said while briefing reporters on the deliberations at the 12th meeting of the all-powerful Council.

The panel at its last meeting approved the final draft of central (C-GST) and integrated (I-GST) laws.

The supporting S-and UT-legislations together with the Compensation Law will go to the Cabinet for a formal nod before they are presented in Parliament in the ongoing Budget session that ends on April 12.

The government is hoping the C-GST, I-GST, UT-and the Compensation laws will be approved in the current session of Parliament and state legislatures will soon clear the S-bills so that the new indirect regime can be rolled out from July 1.

Jaitley said the Council will meet again on March 31 to approve rules after which fitting goods and services in the four-slab structure of 5, 12, 18 and 28 per cent will be taken up.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, March 16 2017. 20:23 IST