Cess
Also called: compensation cess
What is Cess?
A cess is an additional levy charged over and above the base tax and earmarked for a specific purpose. Under GST, compensation cess applies to a small set of goods such as tobacco, aerated drinks and certain vehicles, on top of the usual rate.
Why Cess matters
Cess is easy to overlook when setting up product masters, because it applies to a narrow list. Missing it on a cess-bearing item means under-collecting tax on every sale of that item.
How Cess works in practice
Where cess applies it is charged on the taxable value alongside GST and shown as its own line. Credit of compensation cess can only be used against cess liability, not against GST.
Frequently asked questions
Not to ordinary restaurant service. Aerated drinks and tobacco sold in an outlet can attract it as goods.