GST Cess

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.

Both intrastate and interstate supplies of goods or services would attract GST cess over and above the applicable CGST, SGST, and IGST rates.

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 supplyHSN codeRate for GST Compensation Cess
1.Pan Masala2106 90 2060%
Aerated waters, containing added sugar or other
sweetening matter or flavoured
2202 10
2.Aerated waters2202 10 1012%
3.Lemonade2202 10 2012%
4.Others2202 10 9012%
Tobacco and Tobacco Products24
5.Unmanufactured tobacco (without lime tube) –
bearing a brand name
240171%
6.Unmanufactured tobacco (with lime tube) –
bearing a brand name
240165%
7.Tobacco refuse, bearing a brand name2401 30 0061%
8.Tobacco refuse, bearing a brand name2401 30 00160%
9.Chewing tobacco (with lime tube)2403 99 10142%
10.Filter khaini2403 99 10160%
11.Jarda scented tobacco2403 99 30160%
12.Pan masala containing tobacco ‘Gutkha’2403 99 90204%
CigarettesTobacco refuse, bearing a brand name2401 30 0061%
13.Non- filter
14.Not exceeding 65 mm2402 20 105% + Rs.1591 per thousand
15.Exceeding 65 mm but not 70 mm2402 20 205% + Rs.2876 per thousand
16.Filter
17.Not exceeding 65 mm2402 20 305% + Rs.1591 per thousand
18.Exceeding 65 mm but not 70 mm2402 20 405% + Rs.2126 per thousand
19.Exceeding 70 mm but not 75 mm2402 20 505% + Rs.2876 per thousand
20.Others2402 20 905% + Rs.4170 per thousand
Other tobacco products
21.Cigar and cheroots2402 10 1021% or Rs. 4170 per thousand, whichever is higher
22.Cigarillos2402 10 2021% or Rs. 4170
per thousand, whichever is higher
23.Cigarettes of tobacco substitutes2402 90 10Rs.4006 per thousand
24.Cigarillos of tobacco substitutes2402 90 2012.5% or Rs. 4,006 per thousand whichever is higher
25.Other2402 20 2012.5% or Rs. 4,006 per thousand whichever is higher
26.‘Hookah’ or ‘gudaku’ tobacco tobacco bearing a brand name2403 11 0072%
27.Tobacco used for smoking ‘hookah’or ‘chilam’ commonly known as ‘hookah’ tobacco or ‘gudaku’2403 11 0017%
28.Other smoking tobacco not bearing a brand name.2403 11 9011%
29.Smoking mixtures for pipes and cigarettes2403 19 10290%
30.Other smoking tobacco bearing a brand name2403 19 9049%
31.“Homogenised” or “reconstituted” tobacco, bearing a brand name2403 91 0072%
33.Preparations containing chewing tobacco2403 99 2072%
34.Snuff2403 99 4072%
35.Preparations containing snuff2403 99 5072%
36.Tobacco extracts and essence bearing a brand name2403 99 6072%

 

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.