The Lok Sabha on December 26th approved a bill to increase cess on luxury cars from existing 15% to 25% with a view to increasing funds to reimburse states for revenue loss following the rollout of GST.
The GST (Compensation to States) Amendment Bill, 2017, was passed by the Lower House amid uproar by the opposition over controversial comments made by Union Minister Anant Kumar Hegde on secularism and the Constitution.
The Bill looks to replace the Ordinance which was enforced in September to give effect to the decision of the GST Council. The Ordinance make adequate preparation for increase cess on luxury cars from midsize to hybrid and the luxury cars to 25 %.
In reply to a short debate, Finance Minister Arun Jaitley said the funds collected following the hike in cess on luxury vehicles will be used to compensate states for revenue loss on account of implementation of the GST. He said the GST Council, which comprises state FM, meets every month and takes a decision on the rationalization of taxes in the backdrop of revenue collection.
Participating in the discussion, members demanded that the Goods and service Tax rate should be reduced on a variety of items including sanitary napkins, agriculture equipment, handicrafts, handloom items and sports goods. Some members even adviced that there should be single tax slab instead of four.
At a function in Karnataka on Sunday, Hegde had reportedly said people should identify themselves by their religions and “those who, without knowing about their parental blood, call themselves secular, they don’t have their own identity.They don’t know about their parentage.”