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What is GST Compensation Cess?

In this video, you will get to learn all about GST Compensation Cess. What is GST Compensation Cess? Why it is imposed? etc GST Compensation Cess is a newly introduced concept under the goods and service taxes implemented from July 2017 in India. For the first time, a specific cess has been levied especially for the indirect taxes. GST Compensation Cess is same as Health and Education Cess charged under the Income Tax. GST is a consumption based tax and the revenue goes to the treasury of the state in which the supply of goods or services is finally consumed. As a result of this basic character of GST, the states with heavy manufacturing capacities were facing a major downfall in revenue. To resolve the issue government came up with GST compensation Cess. Under GST Compensation Cess tax at the pre-decided percentage is levied for some notified goods (except on composition dealers). Certain notified goods attracting GST Compensation Cess are Cigarettes Tobacco Coal Aerator water Motor vehicle etc The collection goes to central government and later on distributed amongst the states to be compensated. GST Compensation Cess is calculated on the value of goods or service. GST Compensation Cess is levied for five years presently. Compensation Cess is like all other GST taxes and its input tax credit is also available. But, can be adjusted only against Compensation cess and no inter-head set-offs are allowed. To know more about GST read here https://blog.tax2win.in/understanding...