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What is Compensation Cess? It is extra tax applicable on Certain Goods like Automobiles, Cold drinks etc. It is applicable so that States do not face loss in Revenue due to implementation of GST Normal Case GST Bill Normal Case GST Bill with Cess (GST Rate 28%) (GST Rate 28%+Cess 22%) Sales 100000 CGST 14000 SGST 14000 Total 128000 Sales 100000 CGST 14000 SGST 14000 Cess 22000 Total 150000 Max GST Rate is 28% When Govt wants to charge m ore than 28% Then Cess Charged Different Rates of Compensation Cess Small Petrol Car (Upto 1200 cc and 4 Meter) Others 1200 1500 cc) 1% 17% Small Diesel Car (Upto 1500 cc and 4 Meter) 3% SUV > 1500 Cc 22% Aerated Water 12% Pan Masala 60% Coal 400 per tonne Normally Cess Charged as % (Called Ad Volerem Rate Rate Charged Per Qty (Called Specific Item Rate

About the Author

CA Maninder Singh's photo - Expert in Practical Accounts, Taxation and Efiling
CA Maninder Singh
CA Maninder Singh is a Chartered Accountant for the past 10 years. He also provides Accounts Tax GST Training in Delhi and Pune.