Last updated: December 17th, 2019 5:22 PM

Cess on Tea

Tea is a common man’s beverage. It is the second most consumed beverage in India after water. Bengal and Tamil Nadu are the two major tea growing states in India. As per recent statistics, Assam produces over 53% of our country’s tea and over 13% of world’s tea. In this article, we look at Cess on Tea and its applicability under GST. Know more about GST Cess and its applicability.

No Late Fee for GSTR-1 & GSTR-3B Return

The biggest relief extended to small business by the 31st GST Council is the waiver of late fee for filing GSTR-1 and GSTR-3B return. The GST Council has announced: “Late fee shall be completely waived for all taxpayers in case FORM GSTR-1, FORM GSTR-3B &FORM GSTR-4 for the months/quarters July 2017 to September 2018, are furnished after 22.12.2018 but on or before 31.03.2019.” Thus, filing of Form GSTR-1, GSTR-3B and GSTR-4 will not attract any late fee penalty until 31st March 2019.

GST Annual Return Due Date Extended

All entities having GST registration are required to file GST annual return in form GSTR-9. The due date for filing GST annual return is usually 31st December of each year for the financial year ended on 31st March of the same calendar year. As GST is newly introduced in India, the Government has decided to extend the due date for GST annual return filing to 30th June 2019. The due date for filing GST annual return was originally extended upto 31st March 2019, which has been further extended to 30th June 2019 by the GST Council.

Cess on Tea - Tea Act, 1953

Tea Act, 1953 was formed and made effective from 1st April, 1954. Provision of section 25 (1) of the Tea Act, 1953, provides that Cess on Tea is payable on all the tea produced in India. The cess is collected by the center and credited to Consolidated Fund of India after deducting the expenses of collection. Funds are released by the Central Government in favour of Tea Board from time to time on the basis of the sanctioned budget after due appropriation by the Parliament. Such funds received by the Board are being utilised for meeting the non-plan expenditure.

Rate of Tea Cess - Tea Act, 1953

The Tea Act provides for levy of cess upto 50 paisa per kilogram of tea produced in India, however, the cess is levied at the rate of 30 paisa per kilogram, except in case of Darjeeling tea cess is levied at the rate of 12 paisa per kilogram.

GST Rate and Cess on Tea

The Government of India had abolished various Cess on goods and services in General Budgets viz 2015-16, 2016-17 and 2017-18 to prepare the ground for smooth roll- out of Goods and Service Tax (GST) from 1st July, 2017.  Accordingly, the cess on tea was abolished in India from 1st July 2017 - the date on which GST was rolled out in India. Hence, under GST, cess on tea will not be applicable and only GST will be applicable in the following rates:

HSN Code	Description of Goods	GST Rate
0902	Tea, whether or not flavoured (other than unprocessed green leaves of tea)	5% GST Rate
0902	Unprocessed green leaves of tea	NIL

Find GST rate for other tea and tea products.

Green Leaf Cess - Assam

The Assam government levies a green leaf cess of 0.40 paise per kilogram of green leaf for big plantation under the Assam Taxation on Specific Land. However, the Assam government has recently withdrew the green leaf cess for small tea grower and according to statistics small grower produce 40% of Assam green leaf. Please note that cultivators with an area up to 10.12 hectares are considered small growers, who contribute 44 per cent of the state's total produce per year, and recently Assam government has withdrawn green leaf cess on such small tea growers.

Cess Abolished with GST

Other Cess that was abolished with the GST rollout are:

1. The Rubber Act 1947 – Cess on Rubber
2. The Industries (Development and Regulation) Act 1951 – Cess on Automobile
3. The Tea Act 1953 – Cess on Tea
4. The Coal Mines (Conservation and Development) Act, 1974 – Cess on Coal
5. The Beedi Workers’ Welfare Cess Act 1971 – Cess on Beedis
6. The Water (Prevention and Control of Pollution) Cess Act 1977 – Cess levied on Water consumed by certain industries and by local authorities.
7. The Sugar Cess Act 1982, the Sugar Development Fund Act 1982 – Cess on Sugar
8. The Jute Manufacturers Cess Act 1983 – Cess on Jute Goods manufactured or produced or in part of Jute.
9. The Finance (2) Act 2004 – Education Cess on Excisable Goods
10. The Finance Act, 2007 – Secondary and Higher Education Cess on Excisable Goods
11. The Finance Act 2010 – Clean Energy Cess
12. The Finance Act 2015 – Swachh Bharat Cess
13. The Finance Act 2016 – Infrastructure Cess and Krishi Kalyan Cess

Cess NOT Abolished with GST

The following cess has not been abolished under GST. Hence, the following cess continue to be applicable.

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.