Increasing cess on GST just after two months: Cess should be merged with GST

It refers to Union cabinet giving nod to increase of cess from earlier 15-percent to now 25-ercent over highest GST-slab of 28-percent for luxury cars and SUVs which witnessed price-fall after implementation of GST-regime. Need to increase cess just after two months of GST implementation in the country from 01.07.2017 over a totally irrational and multiple rate-structure exposes lack of wisdom in deciding GST rate-structure which in all other countries has one single rate-structure. Ideally country could have an ideal rate-structure of 10, 30, 50, 100 and thereafter multiples of 100 percent GST rate-structure without having any provision of cess with even petroleum products coming under GST. Then most commodities and services could be easily covered under 10-percent rate-structure for a voluntary and hassle-free tax-compliance giving much more revenue earning than at present.

Even presently, a slight upward revision by fixing GST rates at 6, 12, 18, 30 and thereafter multiples of 30 percent rate-structure abolishing irrationality of cess can give GST regime at least some rational-look. However differential GST rate-fixing for cars and SUVs should be on basis of ex-factory price rather than length or engine-capacity.


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