Goods and Service Tax-GST after being implemented may make smaller cars with engine-capacity upto 1500 cc a bit dearer because of being coming under slab of 28-percent GST because presently these attract a total of 27.5-percent tax with excise-duty at 12.5-percent added by 15-percent VAT. However big cars with engine-capacity above 1500 cc may be bit cheaper from existing tax of 44.5-percent likely to be reduced to 43-percent inclusive of 15-percent cess over 28-percent GST.
Whole fixation of GST-rates is totally irrational at 5, 12, 18 and 28 percent with a provision of levy of cess on top of the peak tax rate on demerit and luxury goods like pan masala, tobacco and certain class of automobiles is totally irrational. GST rates should have been rational in multiples of 5 percent with new categories added for demerit and luxury goods rather than having cess. For example GST rates could be 5, 10, 15, 20, 30, 50, 70 percent etc.
Revenue policy for taxation of cars should also be changed where excise-duty on cars may be imposed according to their ex-factory price rather than other parameters. Presently ultra-luxurious cars with lower engine-capacity attract lower slab of excise-duty, while cheaper cars but with engine-capacity above 1500 cc attract higher slab of excise-duty. For discouraging production of costly cars, excise-duty on costlier cars may be double the excise-duty for cheaper cars. Car-loans for costlier cars should be totally banned. Production of diesel-cars should be altogether banned to avoid use of economy fuel for cars. It is significant that procurement-price for petrol and diesel is almost same, but diesel is priced lower to keep low cost of public-transportation and goods-movement. Only CNG-fitted petrol-cars should be manufactured.
SUBHASH CHANDRA AGRAWAL