Last month, the Goods and Services Council hiked the quantum of cess on mid-sized, large and SUV cars in the range of two to seven percent. This decision has not gone down well with automobile companies. CNBC-TV18 has learnt that the industry is considering sending a detailed note to the government urging them to reverse the hike on compensation cess.
The auto industry which has been a key beneficiary of the Goods and Services Tax (GST) is requesting the government to make certain changes in the rate.
The industry seeks reversal of compensation cess on cars which was hiked between 2 percent and 7 percent in September – they want the government to restore the rate applicable prior to September 11.
It has also demanded that the government restricts compensation rate to three categories of vehicles from the 5 categories at present.
The industry has also requested removing cess on export of vehicles and wants a flat rate of 5 percent on used cars from the current 28 percent and 43 percent of the differential price between buying and selling.They have also demanded to cap GST rate of 12 percent on components used in electric cars which go as high as 18 percent to 28 percent in some cases.