GST Compensation Cess is also known by name of GST Cess. GST Cess was created to provide compensation to states with significant manufacturing sectors. Since the GST is a consumption-based tax, several states saw a drop in income as a result of its adoption. States that were focused on manufacturing thus suffered a loss in tax income.
An extra tax known as the GST cess is imposed in order to reimburse these states. It is imposed on certain items that have been made aware of it, and the money it generates is split among these governments. After the GST is implemented, this Cess will be imposed for a period of five years.
The person who must collect the GST Compensation Cess is:
The GST compensation cess must be collected and paid by all taxable individuals who sell the designated products. Payers of the GST compensation tax are free from it.
Which products are subject to the GST Compensation Cess notification?
The following items have thus far received notification:
- Pan Masala
- Tobacco and tobacco products
- Cigarettes
- Coal, briquettes, ovoids and similar solid fuels manufactured from coal, lignite excluding jet and peat.
- Aerated waters
- Motor vehicles
What is the GST compensation Cess rate that is applicable on these products?
Here you may find the list of notified goods’ GST compensation cess rates.
With effect from July 18, 2017, the GST cess rates for cigarettes have been amended. You can find the updated prices here.
Can I get an input credit for the cess I paid on the importation of these goods?
On the GST Cess paid on inward supplies, input credit may be claimed. However, the credit for Cess payments can only be used to the GST compensation Cess debt.
The GST compensation cess is determined in what way?
The transaction value, or the price at which the products are sold, is the basis on which the Cess is computed. In addition to the GST taxes—CGST + SGST for intrastate goods and IGST for interstate supplies—the Cess shall be imposed.
Read More Article
- Stocks Vs Mutual Fund, Which one better?
- Advantage and disadvantage of Credit Card
- GST History and all details
- Stock Markets Vs Share Markets
- What is cryptocurrency and how does it work?
- How to improve your credit score rapidly
- How to choose right credit card for you.
- Different type of loan in India
- MSME Classification with turnover limits
- Benami Transactions (Prohibition) Act, 1988
- Employee Provident Fund (EPF) , EPS and EDLIS
- Stock market – Wikipedia
