The Goods and Services (GST) Tax Council on Monday increased the cess on cigarettes to correct the unintended outcome of a reduced tax incidence on the demerit good after the roll-out of the new tax. Apart from the highest GST rate of 28%, the cess on cigarettes will now be higher by Rs 485-792 per thousand sticks for different varieties of the commodity. \u201cWhile any reduction in tax incidence on items of mass consumption would be welcome, the same would be unacceptable in case of demerit goods like cigarettes,\u201d the government said in a statement. Meanwhile, the council reckoned that new registrations on the GST Network (GSTN), the IT backbone of the system, have been more than expected. Nearly 7.4 lakh new businesses have registered for GST since June 25 when the registration for new taxpayers was opened. According a study conducted by GSTN, it was estimated that around 4-5 lakh new businesses would register with the system but the near doubling of that number has come as pleasant surprise to the government. GSTN had estimated that growth in the taxpayer base would be 4-5% on an annual basis. With migration of over 70 lakh existing taxpayers into the GST system and another 7.4 lakh new taxpayers, the total GST taxpayer base is numerically close to the previous Centre-state indirect tax assessee base of 80 lakh. Finance minister Arun Jaitley noted that the taxpayer base must have actually expanded already as a section of taxpayers used to register separately for excise\/service tax and VAT in the previous regime. \u201cWith VAT and service tax registrations base of 80 lakh, we had estimated that not more than 4-5 lakh new taxpayers would register, but the numbers prove that businesses have welcomed GST,\u201d GSTN chairman Navin Kumar told FE. He added that while the tax department could better analyse the spurt in numbers, it was possible that businesses realised it would be difficult to carry out trade from outside the ambit of GST. Moreover, this number could jump further as nearly 35,000 new businesses are registering daily. This daily registration rate has not dwindled since June 25, when the window for new businesses to register was opened. In comparison, the daily migration figure for existing taxpayers had come down to 12,000 from 35,000 since June 25. Over 70 lakh existing taxpayers have migrated to GSTN till July 17 after the the migration window opened again on June 25. However, just 90,000 businesses opted for the composition scheme so far. Kumar said that it was perhaps because the stringent eligibility criteria, which allows only those with intrastate supplies to register, may have played a part in the lukewarm response. Registration to the composition scheme is available to those with less than Rs 75 lakh per annum revenue, and is restricted to manufacturers and traders. The window for the scheme will close by July 22 and the chairman urged the businesses to register for the scheme as early as possible as the next chance for the same would be available only next year.