Tobacco- 290%, Pan masala- 135% cess: GST
Tobacco- 290% cess, Pan masala- 135% cess:
GST is a tax structure that is impacting several different aspects and parts of businesses. With all the problems facing with the different taxes in India, India has come up with a single taxes for all needs i.e., GST. GST is now serving to enter in Tobacco and Pan masala for the higher rates and increase in CESS. After the roll out of GST bill, It is believed that it is going to affect different aspects of Businesses such as profitability, cash flow, sourcing, pricing, supply chain and Enterprise Resource Planning (ERP) systems. It is the merging of all the Indirect taxes such as Sales Tax, Service Tax and Excise Tax etc with many advantages for a lawman. With all this GST will be affecting CESS on different items also.Firstly let us understand the meaning of CESS. Cess is a form of tax in India there were different cess in olden days that are, irrigation-cess, educational-cess, and others like these. Cess is even attained now with different taxes such as VAT ad etc.
We have seen in previous articles that GST is impacting different parts and aspects of India in many different ways but what if GST will be affecting Tobacco and Pan Masala too? GST will be affecting these very two important aspects of India. As we all know that nearly 40% of India eats Tobacco and different Pan masala. This step of GST council will influence India in a major attain. The GST Council on Thursday decided to cap the cess rate on tobacco products at Rs 4,170 per 1,000 sticks or 290 percent ad valorem. It also capped the cess on pan masala at 135 percent ad valorem. This cess would be levied on top of the GST to be imposed on these products.
But this will not end up by as Kerala Finance Minister, Isaac Thomas, is in favor of no cess for this industry as he says that in case cess is levied on bidis, cigarettes or any such things , several people will be unable to find a source of living.He said that most of the states will be against imposition of any extra cess on bidis. Nevertheless, few have the opinion that bidis are mostly consumed by the poor and are very injurious to their health, thus favouring hefty cess. The GST Council has provided a 15% on the cess for aerated drinks and luxury cars. We still need to wait for the Council to provide a proper definition of luxury car.The Council also took this opportunity to cap the cess for coal at INR 400 per ton.