Luxury cars to get costlier after GST rolls out

The GST council has decided to make luxury cars costlier by adding 15% levy on top of the 28% GST rate.

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Other products that would be impacted by this decision are pan masala, chewing tobacco and cigarettes, aerated drinks and mineral water, and coal and lignite. More items can later be added to the list.

The council has agreed to fix the cap on cess that would be imposed after GST rolls out, so that the state can be compensated for any revenue loss.

This additional levy would create a fund worth around Rs 50,000 crore.

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"The council will decide the exact levy. What we have cleared today is the ceiling," said revenue secretary Hasmukh Adhia.

An uncertainty over exact levy means that one can’t assess which products would become expensive and which would become cheap under the new regime.

The centre has committed to compensate the states for potential revenue losses for five years since the launch of GST, and this cess would only be applicable for this period; however, it can be extended by the council.

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