GST cess on Pan Masala will now be levied on the basis of retail selling price
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According to a notification issued by the Ministry of Finance, 0.32 times the retail selling price (RSP) of pan masala pouches will be charged as GST cess. The new rates have come into effect from the date of April 1, 2023.
New Delhi. The government has fixed the GST cess on pan masala and tobacco product manufacturers based on retail selling price with effect from April 1. In addition to the Goods and Services Tax (GST) levied at the rate of 28 per cent on pan masala and tobacco products earlier, a cess was levied in proportion to their value. But now this system has been changed. According to a notification issued by the Ministry of Finance, 0.32 times the retail selling price (RSP) of pan masala pouches will be charged as GST cess. The new rates have come into effect from the date of April 1, 2023. The GST cess on pan masala containing tobacco gutkha will be 0.61 times the RSP, while the rate for cigarette and pipe tobacco articles is 0.69 times.
Chewing tobacco, khaini and zarda will attract a cess of 0.56 times the RSP, while the rate for hookah and branded raw tobacco is 0.36 times. With the levy of GST cess on the basis of retail selling price, tobacco manufacturers will now have to pay cess on the final retail price of pan masala and tobacco products leaving the factory. This will help in preventing tax evasion as the cess will be collected at the factory level itself. Rajat Mohan, senior partner, AMRG & Associates, said switching to an RSP-based cess regime could provide the government with a more sustainable source of revenue. He said that tax evasion in the pan masala industry can be reduced by collecting the tax at the manufacturer’s level.
Disclaimer:IndiaTheNews has not edited this news. This news has been published from PTI-language feed.
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