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Pan masala cess
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| Pan Masala attracts multiple levies under GST and Central Excise. Here is the current position: 1. GST Rate: Pan Masala (HSN 2106 90 20) attracts 28% GST. 2. Compensation Cess: In addition to GST, pan masala attracts GST Compensation Cess under the GST (Compensation to States) Act, 2017. The cess is levied at a specific rate (currently Rs. 4000/- per kg for non-tobacco pan masala) or as a percentage — the rate structure was significantly revised in Budget 2023. 3. Budget 2023 Change – Capacity-Based Cess: From April 2023, the GST Council introduced a major change: cess on pan masala and tobacco products is now levied on the basis of RETAIL SALE PRICE (RSP) or capacity-based/registered capacity of the machine — replacing the ad valorem rate. The manufacturer must register packing machines with CBIC and pay cess based on the declared RSP slab. 4. Registration Requirement: Manufacturers of pan masala must register their packing machines under the Special Procedure notified by CBIC (Notification No. 30/2023-CT) and file monthly returns in the new special return format. 5. Applicable Notifications: Refer to Notification No. 01/2017-Compensation Cess (Rate) and its amendments, along with the latest Budget Finance Act amendments for current rates and compliance requirements. 6. Retailer/Trader: Cess is only at the manufacturer level — traders/retailers do not separately charge cess; it is embedded in the MRP. |
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