GST Compensation Cess on goods and services
Section 8 of Goods and Services Tax (Compensation to the States) Act, 2017 [GST Cess Act for short] makes provision for levy of GST Compensation Cess on supplies of goods and services. This cess will be in addition to GST payable. The ceiling on GST Compensation cess is 15% though higher cess is leviable on pan masala and tobacco products.
Thus, all what is achieved by GST can be lost through such cess. Only solace is that this cess can be levied by Central Government. Further, such cess will be only on luxury or SIN goods, though legally, such cess can be imposed on all goods and services.
Let us hope that it will not be imposed on other goods and services. If such cess is imposed on all goods and services, the basic purpose of GST will be defeated.