GST Council Reviews Cess on Cigerrates: New Rates Applicable from Monday Midnight

The Goods and Services Tax (GST) Council on Monday raised the GST compensation cess on cigarattes over the higher rate of 28 per cent. The effect on their prices was lower under the new taxation regime than earlier. The increase will give the government around Rs 5,000 crore more in revenue which would be used for compensating states.

The new rate would be applicable from today midnight.

After the meeting, Finance Minister Arun Jaitley  clarified that the peak GST rate of 28 per cent and ad valorem cess of 5 per cent would remain. However, specific cess on the basis of the length of cigarettes would be raised from midnight Monday.

“It was noted in the first 15 days of the GST implementation that when the rate on cigarettes was translated, the cascading effect of taxes was not factored in. We noted that cigarette companies were getting windfall profit from reduction in cigarette prices, Jaitley said.

		Compensation Cess Rates
Tariff Item		Present rate	Proposed Increase	New rates
	Non- filter
2402 20 10	Not exceeding 65 mm	5% + Rs.1591 per thousand	Rs.485 per thousand	5% + Rs.2076per thousand
2402 20 20	Exceeding 65 mm but not 70 mm	5% + Rs.2876 per thousand	Rs.792 per thousand	5% + Rs.3668per thousand
	Filter
2402 20 30	Not exceeding 65 mm	5% + Rs.1591 per thousand	Rs.485 per thousand	5% + Rs.2076per thousand
2402 20 40	Exceeding 65 mm but not 70 mm	5% + Rs.2126 per thousand	Rs.621 per thousand	5% + Rs.2747per thousand
2402 20 50	Exceeding 70 mm but not 75 mm	5% + Rs.2876 per thousand	Rs.792 per thousand	5% + Rs.3668per thousand
2402 20 90	Others	5% + Rs.4170 per thousand	31%	36% + Rs.4170 per thousand