The Goods & Services Tax (GST), the biggest tax reform yet attempted in India, is now likely to meet the July 1, 2017 deadline with the GST Council clearing the two remaining supplementary bills – State GST (SGST) and Union Territory (UTGST).

As per a PTI report, a maximum of 15 percent on top of the peak GST rate of 28 percent will be levied on luxury goods and aerated drinks after the GST Council approved a cap on cess along with supporting legislations.

According to finance minister Arun Jaitley, the actual cess on demerit goods, which will help create a corpus for compensating states for any loss of revenue from GST implementation in the first five years, may be lower than the cap as the Council has kept a "little" headroom for future exigencies.

Citing an example, he said if a luxury car at present commands a total tax of 40 percent, under the new indirect tax regime, a GST of 28 percent plus 12 percent cess would be levied to keep the tax incidence at the same level. The 15 percent cess cap would apply to luxury cars and aerated drinks. 

The GST Council is to meet again on March 31 to approve rules after which fitting goods and services in the four-slab tax structure of 5, 12, 18 and 28 percent will be taken up.

Also read: GST Council to finalise 4-tier tax structure of 5-28 percent