Saturday 22 July 2017 News Updated at 12:07 AM IST
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Government increases cess rates on cigarettes - Deccan Herald
Government increases cess rates on cigarettes
Annapurna Singh, DH News Service, New Delhi,
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Correcting an anomaly in rate setting by the GST Council, the government Monday increased cess rates on cigarettes which had become cheaper after implementation of Goods and Services Tax from July 1. DH file photo
Correcting an anomaly in rate setting by the GST Council, the government Monday increased cess rates on cigarettes which had become cheaper after implementation of Goods and Services Tax from July 1.

The hike in rates to be implemented from Monday-Tuesday midnight will bring an additional Rs 5,000 to the central exchequer. "The GST Council has decided to hike cess on cigarettes to take the windfall manufacturers were making,” Finance Minister Arun Jaitley said after a review meeting after a fortnight of the GST roll out.

The meeting was conducted through video conferencing after which the finance minister addressed the media here. Jaitley said the anomaly in fixing the rates of cigarettes by the GST Council had brought down the total tax incidence on cigarettes post-GST. "It has been corrected and the pre-GST rates restored,” he said.

"28% tax on cigarettes remains, 5% ad voleram remains and the cess changes as per the length of the cigarettes,” the finance minister said. Consequently, the cess on cigarettes of up to 65 mm was raised by Rs 485 per thousand sticks and on those exceeding 65 mm by Rs 792 per thousand sticks.

Jaitley said while any reduction in tax incidence of items of mass consumption would be welcome, the same would be unacceptable in the case of demerit goods like cigarettes. Sources said cigarettes were the only item of discussion in Monday's GST Council meeting which reviewed the roll out. The finance minister said the roll out had been fairly smooth and both the Centre and states were responding to queries by stakeholders on a real time basis.

To a question on proposed traders strike due to hike in rates of several goods especially textiles, Jaitley said his experience was completely contrary and that input credit helped in bringing down prices of most of the commodities.


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