Updated on: December 17th, 2019 5:12 PM

Cess on Caffeinated Beverages and Motor Vehicles

The Ministry of Finance has announced on 30^th September 2019, that few amendments are made to Section 8 of the Goods and Services Tax Act 2017.

Caffeinated Beverages

The Central Government has made some of the following changes in the compensation Cess rate on Caffeinated Beverages and Motor Vehicles.

• The Goods and Services Tax (GST) has increased the producer charges on caffeinated beverages to 28% from 18% and also 12% cess is imposed on it. (Cess is referred to as a tax on tax charged by the government for any of the specific purposes.)
• This increase in charges has an impact on caffeinated drinks like Red bull, Coca-Cola’s Monster, and Thumbs Up.
• The GST revision on caffeinated drinks or energy drinks has brought with face to equal with soft drinks.
• Thumbs Up, which was charged in the middle of the year 2018, has more than 150 parts per million caffeine content present in it.

Motor Vehicles

The motor vehicles of length that do not exceed 4000 mm, are:

• Petrol, Liquefied petroleum gases (LPG) or compressed natural gas (CNG) driven vehicles which has an engine capacity limited to 1200 cc.
• Diesel driven vehicles should have an engine capacity of a maximum 1500 cc.

The relief offered to automobile producers is on cess of large passenger vehicles that can carry 10 to 13 persons. The cess on such vehicles is reduced from 15% over and above the 28% GST rate, to 1% for petrol vehicles of certain specifications and 3% for diesel vehicles. People with an orthopaedic physical disability can use the Motor vehicles mentioned in the following entry in accordance with the guidelines.

• An officer who is in a rank of Deputy Secretary to the Government of India in the Department of Heavy Industries gives a certificate that, people with orthopaedic physical disability also can use the mentioned goods.

• In S.No. 50 entry in column (2), the entry “8702, 8703 21 or 8703 22”, has been substituted. (which includes Motor vehicles of LPG and CNG which does not exceed 1200cc)
• In S. No. 51 entry in column (2), the given entry “8702, 8703 31”, has been substituted. (which includes diesel driven motor vehicles of engine capacity to the maximum of 1500 cc only)

All the above notification has come to effect from 1^st of October, 2019. The notification is provided below: