Central Board of Indirect Taxes and Customs (CBIC) has issued a Notification No. 3/2023-Compensation Cess (Rate) Dated: 26th July, 2023 regarding changes in the GST Compensation Cess rates for ‘Pan Masala’ and ‘Tobacco Products.’ The decision was based on recommendations made during the 50th GST Council Meeting held in July 2023.
The 50th GST Council Meeting recommended that the ad valorem rate applicable on March 31, 2023, be notified for levy of Compensation Cess on products like pan masala and tobacco, where retail sale price declaration is not legally required. In accordance with this recommendation, CBIC has amended Notification No. 1/2017- Compensation Cess (Rate) dated June 28, 2017.
The notification introduces various changes in the Compensation Cess rates for different categories of tobacco products, both bearing and not bearing brand names. It also clarifies the definition of “Ground Clearance” for motor vehicles known as Utility Vehicles.
MINISTRY OF FINANCE
(Department of Revenue)
Notification No. 3/2023-Compensation Cess (Rate) | Dated: 26th July, 2023
G.S.R. 553(E).— In exercise of the powers conferred by sub-section (2) of section 8 of the Goods and Services Tax (Compensation to States) Act, 2017 (15 of 2017), the Central Government, on the recommendations of the Council, hereby makes the following further amendments in the notification of the Government of India, in the Ministry of Finance (Department of Revenue), No. 1/2017-Compensation Cess (Rate), dated the 28th June, 2017, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 720(E), dated the 28th June, 2017, namely:-
In the said notification,
I. in the Schedule, –
(i) against S. No. 1, for the entry in column (3), the entry “Pan Masala with declared retail sale price” shall be substituted;
(ii) after S. No. 1 and the entries relating thereto, the following S. No. and entries shall be inserted, namely: –
| (1) | (2) | (3) | (4) |
| “1A. | 2106 90 20 | Pan Masala, other than goods covered under S. No. 1 above | 60%”; |
(iii) against S. No. 5, for the entry in column (3), after the words “brand name”, the words “with declared retail sale price” shall be inserted;
(iv) after S. No. 5 and the entries relating thereto, the following S. No. and entries shall be inserted, namely: –
| (1) | (2) | (3) | (4) |
| “5A. | 2401 | Unmanufactured tobacco (without lime tube)– bearing a brand name, other than goods covered under S. No. 5 above | 71%”; |
(v) against S. No. 6, for the entry in column (3), after the words “brand name”, the words “with declared retail sale price” shall be inserted;
(vi) after S. No. 6 and the entries relating thereto, the following S. No. and entries shall be inserted, namely: –
| (1) | (2) | (3) | (4) |
| “6A. | 2401 | Unmanufactured tobacco (with lime tube)– bearing a brand name, other than goods covered under S. No. 6 above | 65%”; |
(vii) against S. No. 7, for the entry in column (3), after the words “brand name”, the words “with declared retail sale price” shall be inserted;
(viii) after S. No. 7 and the entries relating thereto, the following S. No. and entries shall be inserted, namely: –
| (1) | (2) | (3) | (4) | |
| “7A. | 2401 | 30 00 | Tobacco refuse, bearing a brand name, other than goods covered under S. No. 7 above | 61%”; |
(ix) against S. No. 19, for the entry in column (3), after the words “brand name”, the words “with declared retail sale price” shall be inserted;
(x) after S. No. 19 and the entries relating thereto, the following S. No. and entries shall be inserted, namely: –
| (1) | (2) | (3) | (4) | |
| “19A. | 2403 | 11 10 | ‘Hookah’ or ‘gudaku’ tobacco, bearing a brand name, other than goods covered under S. No. 19 above | 72%”; |
(xi) against S. No. 20, for the entry in column (3), after the words “brand name”, the words “with declared retail sale price” shall be inserted;
(xii) after S. No. 20 and the entries relating thereto, the following S. No. and entries shall be inserted, namely: –
| (1) | (2) | (3) | (4) | |
| “20A. | 2403 | 11 10 | Tobacco used for smoking ‘hookah’ or ‘chilam’ commonly known as ‘hookah’ tobacco or ‘gudaku’, not bearing a brand name, other than goods covered under S. No. 20 above | 17%”; |
(xiii) against S. No. 21, for the entry in column (3), after the words “brand name”, the words “with declared retail sale price” shall be inserted;
(xiv) after S. No. 21 and the entries relating thereto, the following S. No. and entries shall be inserted, namely: –
| (1) | (2) | (3) | (4) | |
| “21A. | 2403 | 11 90 | Other water pipe smoking tobacco, not bearing a brand name, other than goods covered under S. No. 21 above | 11%”; |
(xv) against S. No. 22, for the entry in column (3), the entry “Smoking mixtures for pipes and cigarettes, with declared retail sale price” shall be substituted;
(xvi) after S. No. 22 and the entries relating thereto, the following S. No. and entries shall be inserted, namely: –
| (1) | (2) | (3) | (4) | |
| “22A. | 2403 | 19 10 | Smoking mixtures for pipes and cigarettes, other than goods covered under S. No. 22 above | 290%”; |
(xvii) against S. No. 23, for the entry in column (3), after the words “brand name”, the words “with declared retail sale price” shall be inserted;
(xviii) after S. No. 23 and the entries relating thereto, the following S. No. and entries shall be inserted, namely: –
| (1) | (2) | (3) | (4) | |
| “23A. | 2403 | 19 90 | Other smoking tobacco bearing a brand name, other than goods covered under S. No. 23 above | 49%”; |
(xix) against S. No. 24, for the entry in column (3), after the words “brand name”, the words “with declared retail sale price” shall be inserted;
(xx) for S. No. 24A and the entries relating thereto, the following S. Nos. and entries shall be substituted, namely:-
| (1) | (2) | (3) | (4) |
| “24A. | 2403 19 90 | Other smoking tobacco, not bearing a brand name, other than goods covered under S. No. 24 above | 11% |
| 24B. | 2403 91 00 | “Homogenised” or “reconstituted” tobacco, bearing a brand name with declared retail sale price | 0.36R per unit |
| 24C. | 2403 91 00 | “Homogenised” or “reconstituted” tobacco, bearing a brand name, other goods covered under S. No. 24 B above | 72%”; |
(xxi) against S. No. 26, for the entry in column (3), the entry “Chewing tobacco (without lime tube), with declared retail sale price” shall be substituted;
(xxii) after S. No. 26 and the entries relating thereto, the following S. No. and entries shall be inserted, namely: –
| (1) | (2) | (3) | (4) | ||
| “26A. | 2403 | 99 10 | Chewing tobacco (without lime tube), goods covered under S. No. 26 above | other than | 160%”; |
(xxiii) against S. No. 27, for the entry in column (3), the entry “Chewing tobacco (with lime tube), with declared retail sale price” shall be substituted;
(xxiv) after S. No. 27 and the entries relating thereto, the following S. No. and entries shall be inserted, namely: –
| (1) | (2) | (3) | (4) | |
| “27A. | 2403 | 99 10 | Chewing tobacco (with lime tube), other than goods covered under S. No. 27 above | 142%”; |
(xxvii) against S. No. 28, for the entry in column (3), the entry “Filter khaini, with declared retail sale price” shall be substituted;
(xxviii) after S. No. 28 and the entries relating thereto, the following S. No. and entries shall be inserted, namely: –
| (1) | (2) | (3) | (4) | ||
| “28A. | 2403 | 99 10 | Filter khaini, 28 above | other than goods covered under S. No. | 160%”; |
(xxix) against S. No. 29, for the entry in column (3), the entry “Preparations containing chewing tobacco, with declared retail sale price” shall be substituted;
(xxx) after S. No. 29 and the entries relating thereto, the following S. No. and entries shall be inserted, namely: –
| (1) | (2) | (3) | (4) | |
| “29A. | 2403 | 99 20 | Preparations containing chewing tobacco, other than goods covered under S. No. 29 above | 72%”; |
(xxxi) against S. No. 30, for the entry in column (3), the entry “Jarda scented tobacco, with declared retail sale price” shall be substituted;
(xxxii) after S. No. 30 and the entries relating thereto, the following S. No. and entries shall be inserted, namely: –
| (1) | (2) | (3) | (4) | |
| “30A. | 2403 | 99 30 | Jarda scented tobacco, other than goods covered under S. No. 30 above | 160%”; |
(xxxiii) against S. No. 31, for the entry in column (3), the entry “Snuff, with declared retail sale price” shall be substituted;
(xxxiv) after S. No. 31 and the entries relating thereto, the following S. No. and entries shall be inserted, namely: –
| (1) | (2) | (3) | (4) | |
| “31A. | 2403 | 99 40 | Snuff, other than goods covered under S. No. 31 above | 72%”; |
(xxxv) against S. No. 32, for the entry in column (3), the entry “Preparations containing snuff, with declared retail sale price” shall be substituted;
(xxxvi) after S. No. 32 and the entries relating thereto, the following S. No. and entries shall be inserted, namely: –
| (1) | (2) | (3) | (4) | ||||
| “32A. | 2403 | 99 50 | Preparations containing snuff,
covered under S. No. 32 above |
other | than | goods | 72%”; |
(xxxv) against S. No. 33, for the entry in column (3), after the words “brand name”, the words “with declared retail sale price” shall be inserted;
(xxxvi) after S. No. 33 and the entries relating thereto, the following S. No. and entries shall be inserted, namely: –
| (1) | (2) | (3) | (4) | |
| “33A. | 2403 | 99 60 | Tobacco extracts and essence, bearing a brand name, other than good covered under S. No. 33 above | 72%”; |
(xxxvii) against S. No. 34, for the entry in column (3), after the words “brand name”, the words “with declared retail sale price” shall be inserted;
(xxxviii) after S. No. 34 and the entries relating thereto, the following S. No. and entries shall be inserted, namely:-
| (1) | (2) | (3) | (4) | |
| “34A. | 2403 | 99 60 | Tobacco extracts and essence, not bearing a brand name, other than goods covered under S. No. 34 above | 65%”; |
(xxxix) against S. No. 35, for the entry in column (3), the entry “Cut tobacco, with declared retail sale price” shall be substituted;
(xl) after S. No. 35 and the entries relating thereto, the following S. No. and entries shall be inserted, namely: –
| (1) | (2) | (3) | (4) | |
| “35A. | 2403 | 99 70 | Cut tobacco, other than goods covered under S. No. 35 above | 20%”; |
(xli) against S. No. 36, for the entry in column (3), the entry “Pan masala containing tobacco ‘Gutkha’, with declared retail sale price ” shall be substituted;
(xlii) for S. No. 36A and the entries relating thereto, the following S. No. and entries shall be substituted, namely: –
| (1) | (2) | (3) | (4) |
| “36A. | 2403 99 90 | Pan masala containing tobacco ‘Gutkha’, other than goods covered under S. No. 36 above | 204%”; |
(xliii) for S. No. 36B and the entries relating thereto, the following S. No. and entries shall be substituted, namely:-
| (1) | (2) | (3) | (4) | |
| “36B. | 2403 99 90 | All goods, other than pan masala containing tobacco ‘gutkha’, bearing a brand name, with declared retail sale price | 0.43R unit”; | per |
(xliv) after S. No. 36B and the entries relating the, the following S. Nos. and entries shall be substituted, namely: –
| (1) | (2) | (3) | (4) | |
| “36C. | 2403 99 90 | All goods, other than pan masala containing tobacco ‘gutkha’, bearing a brand name, other than good covered under S. No. 36B above | 96% | |
| 36D. | 2403 99 90 | All goods, other than pan masala containing tobacco ‘gutkha’, not bearing a brand name, with declared retail sale price | 0.43R unit | per |
| 36E. | 2403 99 90 | All goods, other than pan masala containing tobacco ‘gutkha’, not bearing a brand name, other than goods covered under S. No. 36D above | 89%”; |
(xlv) against S. No. 52B, in column (3), for the entry, the entry “Motor vehicles known as Utility Vehicles, by whatever name called including Sports Utility Vehicles (SUV), Multi Utility Vehicles (MUV), Multi-purpose vehicles (MPV) or Cross-Over Utility Vehicles (XUV), with engine capacity exceeding 1500 cc ; Length exceeding 4000 mm and Ground Clearance of 170 mm and above.
Explanation: For the purpose of this entry, the Ground Clearance means ground clearance in unladen condition.” shall be substituted;
II. In the Explanation, after clause (4), following clause shall be inserted, namely: –
“(5) For the purposes of this notification, the words “declared retail sale price”, with respect to the goods specified in column (3) of the Schedule above, shall mean the retail sale price of such goods which are required to be declared in compliance with the provisions of the Legal Metrology Act, 2009 (1 of 2010) or the rules made thereunder or under any other law for the time being in force”;
2. This notification shall come into force on 27th July, 2023.
[F. No. 190354/133/2023-TRU]
NITISH KARNATAK, Under Secy.
Note: – The principal notification No.1/2017-Compensation Cess (Rate), dated the 28th day of June, 2017, was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i), vide number G.S.R. 720(E), dated the 28th day of June, 2017, and was last amended vide notification No. 2/2023-Compensation Cess (Rate), dated the 31st March, 2023, published in the Gazette of India, Extraordinary, Part II, Section 3, Subsection (i), vide number G.S.R. 253(E), dated the 31st March, 2023.
