GST Cess

The government has specified the retail sale price-based GST cess rate that would be levied on pan masala and tobacco manufacturers with effect from April 1. This is a departure from the earlier regime that imposed cess, over and above the 28 per cent Goods and Services Tax (GST) rate on ad-valorem basis. As per a finance ministry notification dated March 31, the GST cess rate that would be applicable on pan masala is 0.32 times the retail sale price (RSP) of the pan masala pouch. Pan masala, containing tobacco gutkha, now has a cess rate of 0.61 times the RSP, while the rate for smoking mixtures for pipes and cigarettes is 0.69 times. Chewing tobacco , filter khaini, and jarda scented tobacco attract a cess of 0.56 times the RSP, and the rate for branded unmanufactured tobacco and hookah or gudaku is 0.36 times the RSP. The new rates are applicable from April 1, 2023. Moving to RSP-based levy would mean that manufacturers would now have to pay the cess on the final retail price o

The government has capped the maximum rate of GST compensation cess that would be levied on pan masala, cigarettes and other forms of tobacco and linked the highest rate to their retail sale price. The capping of the cess rate was brought in as part of the amendments to the Finance Bill, 2023, which was passed by the Lok Sabha last Friday. As per the amendment, the maximum GST compensation cess rate for pan masala will be 51 per cent of the retail sale price per unit. In the current regime, the cess is charged at 135 per cent ad valorem. The rate for tobacco has been fixed at Rs 4,170 per thousand sticks plus 290 per cent ad valorem or 100 per cent of the retail sale price per unit. So far, the highest rate was Rs 4,170 per thousand sticks plus 290 per cent ad valorem. The cess is levied over and above the highest Goods and Services Tax (GST) rate of 28 per cent. Changes in schedule-I of GST compensation cess Act, brought in via amendment in Finance Bill, has capped the maximum c

Surge of 15% on annual basis; might exceed BE by Rs 1.3-1.4 trillion

States have been concerned about increasing cases of Centre imposing cesses for garnering additional revenue

The central government has released Rs 17,000 crore to states towards balance GST compensation, taking the total amount released so far this fiscal to over Rs 1.15 lakh crore, the Finance Ministry said on Friday. "With this release, the Centre has released, in advance, the entire amount of Cess estimated to be collected this year till March-end available for payment of compensation to States," the ministry said in a statement. Goods and Services Tax (GST) was introduced in the country with effect from July 1, 2017, and states were assured of compensation for the loss of any revenue arising on account of the implementation of GST for a period of five years. For providing compensation to states, a cess is levied on certain goods and the amount of cess collected is credited to the compensation fund. The central government released an amount of Rs 17,000 crore to states/UTs on November 24, 2022, towards the balance GST compensation for the period April to June 2022. The total amount of

Asserting that the GST had serious "birth defects" which became only worse over the last five years, the Congress on Friday said the GST laws and their implementation have "wrecked the economy"

The government has extended the time for levy of GST compensation cess by nearly 4 years till March 31, 2026. As per the Goods and Services Tax (Period of Levy and Collection of Cess) Rules, 2022, notified by the finance ministry, the compensation cess will continue to be levied from July 1, 2022 to March 31, 2026. The levy of cess was to end on June 30 but the GST Council, chaired by Union Finance Minister Nirmala Sitharaman and comprising state FMs, decided to extend it till March 2026 to repay the loans taken in the last two fiscal years to make up for the shortfall in their revenue collection. After the 45th GST Council meeting in Lucknow in September last year, Sitharaman had said the regime of paying compensation to states for revenue shortfall resulting from subsuming their taxes such as VAT in the uniform national tax GST, will end in June 2022. However, the compensation cess, levied on luxury and demerit goods, will continue to be collected till March 2026 to repay the ...

The states have urged the Centre to extend the five-year compensation period under the GST law before its termination by June-end

In the absence of regulations, international crypto and NFT platforms are escaping the GST net

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Shortfall estimated at Rs 2.7 trn; Rs 1.1 trn may be met via cess collection

This takes the total amount of fund released to Rs 78,000 crore

The latest instalment of Rs 6,000 crore was released to the states on Monday

Centre is likely to propose extending the compensation cess period by another two years beyond June 2022

Time taken in reconciliation of compensation receipts can't be termed as diversion of GST cess fund when the dues to states were fully released by the central government, they said

In a Q&A, Vice-Chairman of Westlife Development which operates McDonald's in West and South India, says his outfit has neither laid off any of its 10,000 employees not cut their pay

GST exemption on such items would jeopardise the interest of the industry and would not result in any significant gains to consumer

There may be no official word yet on how the Centre's tax revenue assumptions for the current year have gone awry

second fiscal stimulus likely to be announced soon

States are planning to pass resolutions in their legislative assemblies; however, such tactics will be used as the last resort if the Centre continues to stall allocations