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# How do I add additional cess to the existing taxes while creating an invoice for demerit or luxury goods?

As per **GST** norms, additional cess has to be levied on certain goods that fall under the 28% slab i.e. demerit goods and luxury goods.

*   **Demerit Goods** are those that are considered unhealthy, degrading or socially undesirable due to the perceived negative effects on consumers. Examples of demerit goods would include tobacco, alcoholic beverages, recreational drugs, junk food etc.
*   **Luxury Goods** are those that are considered to be not a necessity. Its demand increases as the income increases. Expensive cars, televisions, audio systems, mobile phones, refrigerators and gold coins come under this category of goods.

Let’s look at a few scenarios on how additional cess is levied on these products.

**Scenario 1**: Suresh sells tobacco to a customer within his state. He would have to levy an additional cess along with the CGST and SGST. In Zoho Billing, he creates a tax group comprising CGST, SGST and additional cess which he can apply on the invoice.

**Scenario 2**: Kumar sells audio systems to a customer who is in another state. He would have to levy an additional cess along with IGST. In Zoho Billing, he creates a tax group comprising of IGST and additional cess which he can apply on the invoice.

Before you can create the tax group, you would have to add the additional cess as a tax. To create a new tax:

*   Click the **Gear** icon found on the top-right corner of the screen and select **Taxes**.
*   To add a new tax, click **\+ New Tax**.
*   Enter the **Tax Name** as **Additional Cess**.
*   Enter the relevant Rate in **%**.
*   Select **Cess** as the **Tax Type**.
*   Click **Save**.

Now, you can create a new tax group with the additional cess for intra-state and another tax group for interstate transactions. To create a tax group for intrastate or inter-state transactions:

*   Click the **Gear** icon and select **Taxes**.
*   Select the **Tax Rates** tab.
*   Click the **\+ New Tax Group** button on the top-right corner.
*   Enter a **Tax Group Name**.
*   Select **CGST**, **SGST** and **Additional Cess** for intra-state transactions or IGST and additional cess for inter-state transactions.
*   Click **Save**.

### Making the tax group as the default tax

If your business involves only the sale of demerit goods and luxury goods, you can mark these tax groups as your default tax preference. This will ensure that these taxes are chosen by default when you create an item. To make this tax group as default:

*   Click the **Gear** icon and select **Taxes**.
*   Select the **Default Tax Preference** tab.
*   Click the dropdown of _Intra State Tax Rate_ and select the corresponding tax group to mark it as default.
*   Click the dropdown of _Inter State Tax Rate_ and select the corresponding tax group to mark it as default.
*   Click **Save**.

![Mark it as default tax](/invoice/kb/images/gst/additional-cess-preference.png)