The Lok Sabha on Wednesday passed a bill to increase the cess on luxury vehicles from 15% to 25% and use the funds to compensate states for the revenue they have lost after the Goods and Services Tax was rolled out.
The Lower House passed the GST (Compensation to States) Amendment Bill, 2017, after a short debate and amid uproar by Opposition leaders because of Union minister Anant Kumar Hegde’s comments on secularism and the Constitution on Sunday, PTI reported.
The bill will replace the ordinance issued in September, which provided for a hike in the cess under the GST on a range of mid-size, hybrid variants and luxury cars to 25%.
Finance Minister Arun Jaitley said the funds collected after the increase in the cess will be used to compensate states.
During the debate, other members of the Lok Sabha also demanded that GST be reduced on sanitary napkins, agriculture equipment, handicrafts, handloom and sporting goods. Some others suggested a single tax slab instead of the current four.