All about GST Compensation Cess

GST Compensation Cess is an extra cess levied on sure notified items along with GST relevant on it.

GST Compensation Cess also called GST Cess was launched to compensate states that are heavy on manufacturing. As a result of implementation of GST many states confronted a lower in income as it’s a consumption primarily based tax. Thus, states which had been manufacture oriented confronted a loss in income.

To compensate these states, an extra tax by the title GST compensation cess is levied. It’s imposed on sure notified items and income collected from it’s distributed amongst these states. This Cess might be levied for five years from the date of implementation of GST.



Who’s liable to gather GST Compensation Cess?

All taxable individuals promoting the notified items might be liable to gather and remit the GST compensation cess. GST compensation tax payers have been exempted from it.

Which items are notified for charging GST Compensation Cess?

The next items have been notified to date:

  • Pan Masala
    • Tobacco and tobacco merchandise
    • Cigarettes
    • Coal, briquettes, ovoids and related strong fuels manufactured from coal, lignite excluding jet and peat.
    • Aerated waters
    • Motor autos

What’s the fee of GST compensation Cess relevant on these items?



The GST compensation cess charges schedule for the notified items can be found right here.

The GST compensation cess charges on cigarettes have been revised with impact from 18.7.2017. The revised charges can be found right here.

Can avail Enter Credit score on Cess paid on inward provide of those items?

Enter credit score could be availed on GST compensation Cess paid on inward provides. Nonetheless, credit score of Cess paid could be utilized just for the fee of GST compensation Cess legal responsibility.

How is the GST compensation cess calculated?

The Cess is calculated on the transaction worth i.e. the worth at which the products are bought. The Cess must be levied along with the GST taxes- CGST + SGST in case of intrastate provides and IGST in case of interstate provides.

Right here, the cigarettes have been charged an extra cess @ 36% on Rs. 300, since assuming the cigarettes had been above 75mm. The cess tobacco is the extra quantity charged primarily based on the variety of sticks. Right here, the speed is Rs. 4.17 per stick. Therefore, for a field of 20, the extra tax is 4.17*20= 83.4.

(Please consult with the fee record to search out the precise fee relevant to your product. The revised charges for cigarettes are right here)

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