GST cess is a compensation cess imposed under section 8 of Goods and Services Tax (Compensation to State) Act, 2017. It would be imposed for a period of 5 years from GST implementation.
Why is GST cess imposed?
GST cess is imposed on the supply of goods or services to provide compensation to the States for loss of revenue due to the implementation of GST in India. If any funds are unutilised, then at the end of the transition period, it would be shared equally by the Central and State Government.
State Government’s share will be distributed in the ratio of their total revenues from State Tax on the goods and services in the last year of the transition period.
What is applicability of GST cess?
GST cess will be applicable on both supplies of goods and services. All taxpayers under GST except taxpayers registered under GST composition scheme are required to collect and remit GST cess.
Goods on which GST cess is applicable
A table mentioning all the GST Cess rates decided by the Government is as follows:
|Sr.No.||Description of supply||HSN code||Rate for GST Compensation Cess|
|1.||Pan Masala||2106 90 20||60%|
|Aerated waters, containing added sugar or other|
sweetening matter or flavoured
|2.||Aerated waters||2202 10 10||12%|
|3.||Lemonade||2202 10 20||12%|
|4.||Others||2202 10 90||12%|
|Tobacco and Tobacco Products||24|
|5.||Unmanufactured tobacco (without lime tube) –|
bearing a brand name
|6.||Unmanufactured tobacco (with lime tube) –|
bearing a brand name
|7.||Tobacco refuse, bearing a brand name||2401 30 00||61%|
|8.||Tobacco refuse, bearing a brand name||2401 30 00||160%|
|9.||Chewing tobacco (with lime tube)||2403 99 10||142%|
|10.||Filter khaini||2403 99 10||160%|
|11.||Jarda scented tobacco||2403 99 30||160%|
|12.||Pan masala containing tobacco ‘Gutkha’||2403 99 90||204%|
|Cigarettes||Tobacco refuse, bearing a brand name||2401 30 00||61%|
|14.||Not exceeding 65 mm||2402 20 10||5% + Rs.1591 per thousand|
|15.||Exceeding 65 mm but not 70 mm||2402 20 20||5% + Rs.2876 per thousand|
|17.||Not exceeding 65 mm||2402 20 30||5% + Rs.1591 per thousand|
|18.||Exceeding 65 mm but not 70 mm||2402 20 40||5% + Rs.2126 per thousand|
|19.||Exceeding 70 mm but not 75 mm||2402 20 50||5% + Rs.2876 per thousand|
|20.||Others||2402 20 90||5% + Rs.4170 per thousand|
|Other tobacco products|
|21.||Cigar and cheroots||2402 10 10||21% or Rs. 4170 per thousand, whichever is higher|
|22.||Cigarillos||2402 10 20||21% or Rs. 4170|
per thousand, whichever is higher
|23.||Cigarettes of tobacco substitutes||2402 90 10||Rs.4006 per thousand|
|24.||Cigarillos of tobacco substitutes||2402 90 20||12.5% or Rs. 4,006 per thousand whichever is higher|
|25.||Other||2402 20 20||12.5% or Rs. 4,006 per thousand whichever is higher|
|26.||‘Hookah’ or ‘gudaku’ tobacco tobacco bearing a brand name||2403 11 00||72%|
|27.||Tobacco used for smoking ‘hookah’or ‘chilam’ commonly known as ‘hookah’ tobacco or ‘gudaku’||2403 11 00||17%|
|28.||Other smoking tobacco not bearing a brand name.||2403 11 90||11%|
|29.||Smoking mixtures for pipes and cigarettes||2403 19 10||290%|
|30.||Other smoking tobacco bearing a brand name||2403 19 90||49%|
|31.||“Homogenised” or “reconstituted” tobacco, bearing a brand name||2403 91 00||72%|
|33.||Preparations containing chewing tobacco||2403 99 20||72%|
|34.||Snuff||2403 99 40||72%|
|35.||Preparations containing snuff||2403 99 50||72%|
|36.||Tobacco extracts and essence bearing a brand name||2403 99 60||72%|
In case you are confused about GST as a business owner, feel free to consult the GST experts at LegalRaasta. You can get comprehensive assistance with GST Registration and GST Return Filing. You can also use our GST software for doing end-to-end GST compliance.