cess levied by State Government

[Guest]

What Will be the fate of cess levied by state government's agricultural market committee on cotton,cotton waste, after the commencement of GST Act

Joseph David

[KASTURI SETHI]

Cesses will also be subsumed into GST.

[YAGAY andSUN]

Cesses of any kind including Surcharge on State VAT shall be subsumed in GST for the purpose of removing the cascading effect i.e. Tax on Tax and for ease of doing business.

[Ganeshan Kalyani]

Sir, all State taxes shall subsumed into SGST. Thanks.

[CSSANJAY MALHOTRA]

Dear Friends,

Not decided as such and the same to be finalised by GST Council as different states have different cesses.

Taxes levied by local bodies (Municipal Corporation etc...) may remain out of GST as has been proposed so that state development activities should not be disturbed. Also needs to be seen whether Central Govt should agree to this as their compensation to states would become higher than.

[KASTURI SETHI]

Sh.CS Sanjay Malhotra Ji,

Yes, Sir. Changes are being proposed and will be finalised by GST Council. About one year ago, cesses were proposed to be subsumed into GST. There are so many factors to be considered by the GST Council. Similarly, earlier threshold exemption limit was proposed to be Rs.ten lakhs per year under GST but now there is a proposal of hike in threshold exemption limit to ₹ 25 lakhs. I mean to say so many issues are being reconsidered.

[DR.MARIAPPAN GOVINDARAJAN]

The finalized Act in GST will decide the fate.

[YAGAY andSUN]

In our view, it would be better if representation regarding CESS is made to the Government of India to raise these concerns as again leving/imposing CESS in GST Regime would bring the change in VAT/CST/Excise era.

[Ganeshan Kalyani]

Sir, yes no other indirect tax should be charged other than GST. It would have been an ideal tax mechanism. But it is not going to be so. The discussions was going on the meeting in respect of GST saying that exemptions if continued in GST then the rate of GST has to be increased to compensate the revenue of the Govermmet. Likewise if Cess are to be subsumed in GST then the rate have to be increased more.

Now the rate of 18% was proposed but the states are urging to keep the rate above 20%. Thanks.

[YAGAY andSUN]

Praying to God that Rate of GST should be 18%, It will hurt economy if it is fixed above 18%.

[Ganeshan Kalyani]

Yes sir. The government should hope that if assessee base will increase the tax collection also will increase so it may be right to keep the rate as 18%. Let us wait. Thanks.

AI Summary

Cess subsumption into GST may eliminate state cesses but final determination awaits GST Council and could affect GST rates. Whether state cesses on cotton and cotton waste will continue post-GST depends on GST Council and enacted law; contributors generally report that cesses are to be subsumed into GST to remove cascading tax, but final treatment varies by state and may require higher GST rates or compensation arrangements, while local body levies may be treated separately.