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GST to make small cars and hybrids more expensive in India

20 Mai 2017

To implement the Goods and Services Tax (GST), the Finance Minister Haseeb Drabu Thursday said that state government will introduce the GST bill in next 30 days in state legislature, local news agency KNS said on Thursday. The GST Council will meet again on 3 June.

"Government's decision to levy 5 per cent and 12 per cent tax for economy and business class is a very good decision which will continue to support affordable fare regime in India".

For example, the iPhones being made out of Peenya, Bengaluru are now likely to be billed to consumers at a higher rate.

The govt. has chose to levy zero tax on majority of essential food items, which comprise almost 50 per cent in the consumer price index. Though some feel, there is need for more clarity here as it may not always work and it would all depend on the API cost as a proportion of the formulation cost. The same rate is applicable for tiles, ceramics and sanitary-ware versus the current tax rate of 18-24%. This makes outsourcing expensive and in-house production more attractive. Bio gas plant, wind mills and kerosene lantern will also be under the 5 per cent tax rate.

Auto industry body SIAM today welcomed the GST rates for automobiles saying the new tax rates would help in stimulating demand. This is being opposed by health and anti-cancer advocates.

Eating out at a non-AC restaurant in Karnataka will be three times costlier, while AC restaurant bills will nearly double after the GST roll out on July 1. ITC rose to Rs 286.40 a share, a gain of Rs 8.50.

For phones that are manufactured and sold within India, the duty varied from 7.5-8% to 17%, including the value added tax (VAT) which varied between 5% to 14.5%. However, this did not find favour with most states.

With the implementation of uniform taxation across the country, the road logistic sector will see inherent advantages with easing out of various bottlenecks and complexities involved in transportation. "The department can suo motu take action", he said. They want the trial period to extend till March.

Now, the State Government will have to pass the SGST to pave the way for switching over to the new tax regime.

Though opposition Congress demanded that the Odisha GST Bill, 2017 be sent to the Select Committee for more deliberation, the House passed the legislation through a voice vote during a special session convened for this particular objective. He said the entertainment tax has been merged with service tax and a composite 28 per cent levy charged on cinema services as well as gambling and betting at race course.

Small cars of less than four meter length and with petrol engine of up to 1200 cc will attract 1 per cent cess on top of the peak rate.

The SUV segment, which has seen handsome growth of 29.91% in FY2017, is now subjected to a heavy tax structure of around 55 percent - SUVs and large cars with engines bigger than 1500cc.

GST to make small cars and hybrids more expensive in India