GST Council divided over cess on luxury goods
20.10.2016 1. GST Council met earlier this week. Differences appeared over the levy of cess on luxury and environmentally sensitive goods and it prevented a decision on slabs for the proposed goods and services tax (GST). 2. T he Govt of India had proposed four slabs of 6%, 12%, 18% and 26%. While luxury and environmentally sensitive goods were to be in the top bracket, they were also supposed to face a cess, as an interim measure to deal with compensation . The cess on coal alone was expected to fetch Rs 26,000 crore annually , with the levy on other goods expected to rake in another Rs 24,000 crore. This money will flow into a dedicated fund and is proposed to be used for compensating states for any revenue loss on implementing GST. 3. However, states such as Kerala and Tamil Nadu opposed the plan to levy a cess on luxury goods and instead suggested that the top slab of 26% be increased. They backed a higher burden on tobacco, while insisting...