Maximum GST compensation cess rate for tobacco products capped

The government has put a cap on the maximum rate of GST compensation cess to be levied on tobacco products like cigarettes and pan masala, among other items. The cap is among the 75 amendments made in the Finance Bill, which was passed in Lok Sabha on March 24. The compensation cess has been linked to the maximum rate of their retail sale price. As per the Finance Bill, pan masala will attract the maximum GST compensation cess of 51 per cent of the retail sale price per unit. Currently pan masala is charged at 135 per cent ad valorem. Similarly, 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. The cess is levied over and above the highest GST rate of 28 per cent.