GST new slabs
Finance Minister Nirmala Sitharaman gave Diwali gift to the countrymen on the night of 3 September. In the GST Council meeting, it has been announced to change the tax slab. After about 11 hours of churning, the central government abolished the tax slab of 12 per cent and 28 per cent and has retained the slabs of only 5 per cent and 18 per cent. At the same time, the government took a big decision and decided to abolish the cess i.e. additional tax. With this, all expensive things will become cheaper than before. The auto sector can get the most benefit from the end of cess. Let us tell you about it by detail.
What is cess?
Cess is a type of tax. Which has been put on the goods towards the central government. It has been spent with special purpose and if the revenue received from this tax is spent in emergency, in an emergency. Generally, the sector from which the cess is charged. It is spent for the betterment of the same sector. Cess money remains with the central government. It is not given to the states.
The government, in addition to GST Companies cess, National Calcity Constipation Cess, Building and other construction workers welfare cess, road and infrastructure cess, health and education cess, cess, cess, and exports, and are also removed from time to time. When the center is needed, the cess is applied and it feels that it should be removed, then the cess can also be removed.
Auto sector will benefit
The auto sector will get a lot of benefit of removing the cess from the central government. This will make all the cars cheaper even if it is of the range. After not getting the cess, prices from small cars to big cars will be reduced. For example, if we talk about 4 meters in length cars whose engine is up to 1200cc (petrol) or 1500cc (diesel). They are currently charged with a tax of 28 percent and 3 percent cess. That is, the total tax is 31 percent. However, due to the change in the slab from the government and withdrawal of cess, these cars will be taxed only and only 18 percent. This category will include vehicles like Maruti Alto, Tata Punch, Hyundai Grand i10.
Apart from this, the prices of luxury vehicles will also be reduced compared to earlier. Because they will not get cess. The government in SUV vehicles whose engine capacity is more than 1500cc. The length is more than 4 meters and the ground clearance is 170mm or more, it has been decided to impose a 40 percent sin tax on them. Right now, 28 percent tax is levied on them. The total total tax is 45 percent. But after removing the cess towards the government, the total tax rate will be only 40 percent and only 40 percent. This simply means that expensive cars will also become 5 percent cheaper after 22 September.
Who puts cess?
The central government can put cess in India, but before putting it, it has to pass a law in Parliament. The purpose of cess in the law should be clear. It is not applied without any clear purpose. Cess cannot be applied by the state government. For example, it has also been told above that even the money recovered from it does not go to the state government. The central government remains with the government and the government spends it according to the need.