Applicability of GST Cess on Sales

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Sarthak Abhyankar (Querist)
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21 October 2022 Sir/Madam,
I have one query
One of my client doing Cold drink Business for his Purchase comes at 28% GST plus 12% cess. And his all Sales to BtoC. Can he liable to pay cess on his sales Or not..
(Client taken GST Registration as Regular tax payer.)
Please help.
Thanks...

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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06 July 2024 In the case of your client who is engaged in the cold drink business and sells to B2C (Business to Consumer) customers, the applicability of cess (compensation cess) on sales needs to be understood based on the nature of the goods sold and the GST rates applicable.

### Understanding Compensation Cess:

1. **Goods Subject to Cess**: Compensation cess is levied on specific goods or services under GST, primarily to fund compensation payments to states for revenue losses due to the implementation of GST.

2. **Nature of Cold Drinks**:
- Cold drinks generally attract a GST rate of 28% under the category of aerated waters.
- Additionally, aerated waters attract a compensation cess of 12%.

3. **Sales to B2C Customers**:
- When your client sells cold drinks to B2C customers, the GST rate applicable would be 28% + 12% cess (total 40%).
- The cess is levied at the point of supply (i.e., at the time of sale) and is collected from the consumer by the supplier (your client).

### Liability to Pay Cess:

- **Registration Type**: Since your client has registered as a regular taxpayer under GST, they are responsible for collecting GST and cess from their customers (B2C sales).
- **Collection and Payment**: Your client needs to charge and collect GST at the rate of 28% + 12% cess on sales of cold drinks to B2C customers. This cess collected must be deposited to the government along with GST during the GST return filing process.

### Conclusion:

Yes, your client is liable to pay cess on their sales of cold drinks to B2C customers. The applicable rate includes 28% GST plus a 12% cess, totaling 40%. Ensure that the cess collected from customers is correctly accounted for and paid to the government during GST return filing to remain compliant with GST regulations.

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