How to calculate Cess on GST

Introduction

 GST Cess basically known as GST Compensation Cess.

Goods and Services Tax (Compensation to States) Act, 2017 was enacted to levy Compensation Cess for providing compensation to the States for the loss of revenue arising on account of implementation of the goods and services tax with effect from the date from which the provisions of the Central Goods and Services Tax Act is brought into force, for a period of five years or for such period as may be prescribed on the recommendations of the GST Council.

Provided that, It will be further extend for a period of five years.

The Compensation Cess levied on those taxpayers (other than exporter and composite taxpayers) who engaged in supply of specified goods or services or both accordance with the provisions of section 3 of the Customs Tariff Act, 1975.

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What goods covered under compensation cess?

Compensation cess levied on the said goods under section 12 of the Customs Act, 1962:

Goods	GST Compensation Cess Range
Coal	Rs. 400 per tonne
Aerated Drinks	12%
Motor Vehicles	1% to 22%
Pan Masala	60%
Tobacco	61% to 204%

 

How to calculate cess on GST with some examples:

E.g1: Suppose Assessable Value is Rs. 1,00,000

Custom Duty @10%; Social Welfare Surcharge @1%; ISGT @28% and Compensation cess @12%.

Solution:

Particulars	Rs.
Assessable Value	1,00,000
Custom Duty (Rs. 1,00,000 x 10%)	10,000
Social Welfare Surcharge (Rs. 1,00,000 x 1%)	1,000
Total (A)	1,11,000
IGST (1,11,000 x 28%)	31,080
Cess (1,11,000 x 12%)	13,320
Total Invoice Value	1,55,400

 E.g2: Suppose Motor Car value is Rs. 12,00,000

ISGT @28% and Cess @1%.

Solution:

Particulars	Rs.
Taxable value of motor car	12,00,000
IGST (12,00,000 x 28%)	3,36,000
Cess (12,00,000 x 1%)	12,000
Total Invoice Value	15,48,000