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Cabinet clears Ordinance to hike cess to 25 pc on mid-size, luxury vehicles and SUVs

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GST

[vc_row][vc_column][vc_column_text]The new levy will be in charged in addition to taxes on sale of the vehicle. GST Council, the apex tax rate setting body, had on 5 August approved raising cess on SUVs, mid-sized, large and luxury cars that had become cheaper after the rollout of the Goods and Services Tax regime on July 1

In a move that is certain to hit the automobile sector hard and dampen the spirit among driving enthusiasts planning to buy not just luxury cars or sports utility vehicles but even mid-sized cars, the Union Cabinet, on Wednesday, approved an Ordinance that sets to increase the cess on such vehicles from the current ceiling of 15 per cent to a whopping 25 per cent.

The new levy will be charged in addition to the 28 per cent ceiling of taxes charged on the sale of mid-size cars, luxury and sports utility vehicles (SUVs) under the new Goods and Services Tax (GST) regime that was rolled out on July 1 this year.

“The proposal of imposition of higher cess has been cleared,” a source privy to the Cabinet’s decision said. The GST Council – the apex tax rate setting body – may, in its next meeting scheduled for September 9, decide on the date when the increased cess will be applicable.

Arun JaitleyThe Union finance ministry had, on August 7, said that the GST council chaired by finance minister Arun Jaitley had recommended to the Centre to move legislative amendments needed for raising the maximum ceiling of cess that can be levied on motor vehicles to 25 per cent from the present cap of 15 per cent.

Under the new GST regime, cars attract the top tax rate of 28 per cent but are also charged with a cess of 1to 15 per cent for the creation of the state compensation corpus. After the introduction of GST, the total tax incidence on motor vehicles (GST plus compensation cess) had come down when compared with the total tax incidence in the pre-GST regime.

However, raising the cess requires an amendment to the Schedule of Section 8 of the GST (Compensation to a State) Act, 2017, hence the need for the Ordinance that was cleared by the Union Cabinet on Wednesday.

The highest pre-GST tax incidence on motor vehicles worked out to about 52 to 54.72 per cent, to which 2.5 per cent was added on account of Central Sales Tax, octroi, etc. Against this, the total tax incidence on these vehicles post GST rollout fell to 43 per cent.

The GST Council was of the view that to take the tax incidence to pre-GST levels, the highest compensation cess rate required is 25 per cent.

Prices of most SUVs were cut between Rs 1.1 to Rs 3 lakh after the GST rollout, which subsumed over a dozen central and state levies including excise duty, service tax, and VAT from July 1.

Under GST, a cess was levied on cars, tobacco, and coal to create a corpus for compensating states for any loss of revenue from their taxes like VAT being unified with central levies like excise duty and service tax in the GST.[/vc_column_text][/vc_column][/vc_row]

Latest business news

Xbox announces 3,200 layoffs as Asha Sharma outlines major restructuring plan

Xbox has announced plans to lay off 3,200 employees over the next year while introducing a major restructuring programme that includes management changes, studio restructuring and cost-cutting measures.

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XBOX layoff

Xbox has announced plans to reduce its workforce by 3,200 employees, representing around 20 per cent of its total staff, over the coming year as part of a broader restructuring programme linked to Microsoft’s increased investment in artificial intelligence.

According to an email shared with employees by Asha Sharma, the company will begin the process immediately, with 1,600 employees leaving on Monday, while the remaining job reductions will take place during FY27. The company also plans to divest four gaming studios and is preparing to separate from another.

Business reset planned amid financial challenges

In her message to employees, Sharma said the company’s current financial position required significant changes, stating that Xbox’s business was operating at substantially lower margins than comparable platform and publishing companies.

She said the layoffs were not a reflection of employees’ commitment or abilities but were part of a wider effort to strengthen the company’s long-term business.

The workforce reduction comes as Microsoft continues implementing AI-focused cost-cutting measures across its operations. Overall, the technology company is reportedly cutting 4,800 jobs, with Xbox accounting for the largest share.

Sharma also described the gaming sector as experiencing one of its most challenging hardware periods and said the company needed to “reset Xbox” to improve its future performance.

Company to streamline operations and reduce management layers

As part of the restructuring strategy, Xbox plans to simplify its organisational structure, revise its content portfolio and improve platform operations.

According to Sharma, the company currently loses 64 cents for every dollar invested annually, making operational efficiency a key priority.

She said Xbox would increasingly support independent game creators by offering open development tools and broader audience access.

The restructuring will also see Mojang and King report directly to Sharma. She said both studios have evolved into major gaming platforms with large monthly active player bases and will play a central role in Xbox’s future strategy.

To improve decision-making, the company plans to significantly reduce its management hierarchy. Sharma said some departments currently have as many as 14 management layers, which slow down operations. Xbox aims to reduce this to no more than five layers, and in some cases, only three.

The company will also reduce vendor spending by 50 per cent as part of its cost-saving measures.

Helen Chiang promoted to Chief Operating Officer

Alongside the restructuring announcement, Sharma confirmed the promotion of Helen Chiang to the newly created position of Chief Operating Officer.

Chiang will oversee profit and loss responsibilities across Xbox’s content, hardware, platform and services divisions while reporting directly to Sharma.

According to Sharma, the new operating structure is intended to improve investment decisions, strengthen accountability and better integrate the company’s various business units.

Despite the ongoing restructuring and job cuts, Sharma said Xbox remains committed to long-term growth and plans to continue investing heavily in the business, while placing greater emphasis on disciplined spending and strategic priorities.

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Bank holiday today: Are banks open or closed on June 29? Here’s what RBI calendar says

Banks in Himachal Pradesh and Mizoram will remain closed on June 29, 2026, due to regional holidays, while banking operations will continue normally in most other states.

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Bank Holidays

As June comes to an end, many customers are wondering whether banks across the country are open on June 29, 2026. According to the Reserve Bank of India’s (RBI) holiday calendar, bank operations will not be affected nationwide, but branches in some states will remain closed due to local holidays.

Banks closed in these states on June 29

Banks will remain shut in Himachal Pradesh on Monday, June 29, on account of Sant Guru Kabir Jayanti. In addition, bank branches in Mizoram will remain closed to observe Remna Ni, a regional public holiday.

However, bank branches in most other states and Union Territories are expected to function normally as June 29 is not a nationwide banking holiday.

Will online banking services remain available?

Even when physical branches remain closed, customers can continue using digital banking facilities. Services such as internet banking, mobile banking, UPI transactions, ATM withdrawals and cash deposits at ATMs will remain operational.

Customers planning to visit a bank branch are advised to check with their local branch beforehand, as holiday schedules may vary depending on the state and local observances.

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Union Budget 2026 highlights: Nirmala Sitharaman Raises Capex to Rs 12.2 Lakh Cr, West Bengal Gets Major Allocation

Finance Minister Nirmala Sitharaman is presenting the Union Budget 2026 in Parliament today. Follow this space for live updates, key announcements, and policy insights.

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Finance Minister Nirmala Sitharaman arrives to present Union Budget 2026

Finance Minister Nirmala Sitharaman will shortly present the Union Budget 2026 in the Lok Sabha, marking her ninth consecutive Budget. The annual financial statement is expected to outline the government’s policy priorities, reform agenda and spending plans for the coming year. Stay tuned for live updates, key announcements and immediate reactions as the Budget speech unfolds.

Finance Minister Nirmala Sitharaman tabled her ninth Union Budget today, beginning her speech at 11 am.

Nirmala Sitharaman is set to present her ninth Union Budget today, with the finance minister scheduled to begin her speech at 11 am.

Budget 2026 live updates: Presenting the Union Budget for 2026–27, Finance Minister Nirmala Sitharaman said the occasion coincided with Magh Purnima and the birth anniversary of Guru Ravidas. She noted that over the past 12 years, India’s economic journey has been defined by stability, fiscal discipline, sustained growth and moderate inflation.

The budgeted fiscal deficit for fiscal 2026 is estimated at 4.4 per cent of gross domestic product (GDP)

Planned capital expenditure this fiscal year Rs 11.2 lakh crore

Rare earth corrdiors in Odisha and Kerala

Hi-tech tool rooms to be set up by PSUs

Construction equipment scheme to be launched

Container manufacturing scheme for Rs 10,000 crore over 5 years

Rs 10,000 crore SME Growth Fund

Semi-conductor mission to get Rs 40,000 crore

Rs 12.2 lakh crores for infrastructure development

Dedicated RITES to repurpose land of Central PSUs

20 new waterways over next 5 years to be connected

7 high-speed corridors on rail

High-level committee on banking for next phase of Viksit Bharat

Capital expenditure hike of to ₹12.2 lakh crore in Budget 2026, with West Bengal receiving a significant share of allocations.

Mahatma Gandhi Gram Swaraj Initiative aimed at boosting the khadi, handloom, and handicrafts sectors.

High-speed rail corridors: Mumbai-Pune, Pune-Bengaluru, Hyderabad-Bengaluru, Chennai-Bengaluru, Delhi-Varanasi, Varanasi-Siliguri, Pune-Hyderabad

Five university campuses to be established near industrial corridors

Lakpati Didi program expanded in Budget 2026 to reach more beneficiaries across India.

Fiscal deficit for FY26 revised to 4.4%; Budget Estimate for FY27 set at 4.3%.

TCS on overseas tour packages cut to 2% to ease travel costs

Tax holiday to foreign companies that provide cloud services by setting up data centres in India till 2047

17 cancer drugs exempted from import duties

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