Extra cess against policy

The proposed structure of levying cess on ultra-luxury and sin goods is a departure from the GST concept as envisaged initially and the Centre would have absolute powers in future to alter the cess rate, which could go up to 2 per cent, experts said.

The GST Council on Tuesday mooted a four-slab GST tax structure of 6, 12, 18 and 26 per cent with lower rates for essential items and the highest for luxury goods that will also be levied with an additional cess.

“Cesses are being subsumed under GST and hence the levy of a new cess was a complete surprise. Proposal to have 5 rate structure is not aligned to the concept of simplified tax regime. Multiple slabs lead to complications on compliance and issues on classification,” PwC Partner (Indirect Tax) Anita Rastogi said.