If you have received a bill and looked at the details toward the end, there were cesses added that lightened the weight of your wallet.

Good news is, that’s changed!

Although, the transition to the new direct taxation system is a difficult one, Goods and Services Tax (GST) is expected to be a boon for the country.

And already some positive effects have begun to take effect.

For one, cesses were charged on the tax collected and used for a particular purpose. While we are accustomed to paying various cesses such as Krishi Kalyan cess and Swachh Bharat cess to name a few, the good news is these cesses will not be applicable now.

This is because the GST has subsumed all of them, and/or has cancelled them.

The groundwork started in the Financial Year (FY) 2015-16 as the Government began repealing cesses since then. The statement released by the Finance Ministry on June 07, 2017 stated that, “The Central Government in the last three General Budgets viz 2015-16, 2016-17 and 2017-18 has gradually abolished various cesses on goods and services in order to prepare the ground for smooth roll- out of Goods and Service Tax (GST) from 1st July, 2017. The Central Government has taken this step in stages by abolishing various cesses so that it is easier to fit in various goods and services in different tax slabs for GST”.

Some popular cesses that will no more be applicable under GST are:
 

• Clean Energy Cess,
• Swachh Bharat Cess,
• Infrastructure Cess,
• Krishi Kalyan Cess Cess On Rubber, Beedis, Tea, Sugar, water consumed by certain industries and by local authorities, and that on manufactured jute goods

However, there are 7 cesses that will continue even under GST regime.

These are as follows:

1. The Finance (2) Act 2004 – Education Cess on Imported Goods
2. The Finance Act, 2007 – Secondary and Higher Education Cess on Imported Goods
3. Cess on Crude Petroleum Oil under the Oil Industry Development Act, 1974
4. Additional Duty of Excise on Motor Spirit (Road Cess)
5. Additional Duty of Excise on High-Speed Diesel Oil (Road Cess)
6. Special Additional Duty of Excise on Motor Spirit
7. NCCD on Tobacco and Tobacco Products and Crude Petroleum Oil.

The cesses mentioned above either belong to categories not covered under the GST regime or pertain to Customs, and thus will continue.

The Government has directed manufacturers and traders to pass on the benefits of GST to the end customers. Speaking about the subject, Finance Minister, Mr Arun Jaitley said, “The overall incidence of tax after implementation of GST will be less especially in case of the consumer goods than the present incidence of tax, therefore, it is imperative on part of the trade and industry to pass on these benefits to the consumers at large.”

As a customer, scrutinise receipts and bills thoroughly, especially during this initial implementation stage of GST. This way you ensure that you are taxed as per the GST rates, and the service provider or trader is not collecting any amount under the head of taxes and cesses that has been discontinued.

The Government has assured to take stern action against anyone indulging in such malpractices.

It’s worth tracking the tangible benefits of GST.

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