The Taxation Laws Amendment Act, 2017 replaced Clean Energy Cess with _____.

Correct option is C

The correct answer is (c) GST Compensation Cess.

The Taxation Laws (Amendment) Act, 2017 replaced the Clean Energy Cess with the GST Compensation Cess to align with the introduction of the Goods and Services Tax (GST) in India.

What is the GST Compensation Cess?

Purpose:

• GST Compensation Cess was introduced to compensate states for any revenue loss incurred during the transition to GST.
• It is levied on specific luxury and demerit goods, such as coal, tobacco, aerated drinks, and motor vehicles.

Cess on Coal:

• The Clean Energy Cess was earlier levied on the production and import of coal to fund renewable energy projects.
• Post-2017, the GST Compensation Cess replaced it, but the revenue is still partially used for environmental and energy-related initiatives.

Levy:

• Collected by the central government and distributed to states.

Duration:

• Initially intended for a five-year period (2017–2022), it has been extended beyond 2022 to ensure sufficient compensation to states.

Additional Information:

• Clear Air Cess: Does not exist as a formal tax in India.
• Environment Cess: Was proposed in some states but is not a national tax.
• Sustainability Compensation Cess: Not applicable or introduced under Indian tax laws.

Goods and Services Tax (GST) Council
The Goods and Services Tax (GST) Council is a constitutional body established to streamline the indirect tax system in India. It serves as a joint forum for both the Central Government and State Governments to discuss and decide on matters related to GST.

Composition:

• Chairperson: The Union Finance Minister
• Members:
  • The Union Minister of State in-charge of Revenue or Finance
  • The Minister in-charge of Finance or Taxation or any other Minister nominated by each State Government