The first meeting of the Group of Ministers constituted for Compensation Cess was held in New Delhi today. According to sources, in this meeting, the states have requested to merge the cess into the tax rates itself. Along with this, there was also a discussion about what will be the form of cess after March 2026. At present, cess is levied on many luxury items and sin goods. The GST Council has fixed the deadline for collection of cess as March 2026. Let us tell you that since the implementation of GST, the loss incurred by the states is compensated by compensation cess. Cess is being collected since the implementation of GST in 2017.

 

This meeting is the first meeting of the Group of Ministers nominated by the GST Council on the restructuring of compensation cess. This 10-member panel is headed by Minister of State for Finance Pankaj Chaudhary. Punjab Finance Minister Harpal Singh Cheema, Chhattisgarh Finance Minister Om Prakash Chaudhary, West Bengal Finance Minister Chandrima Bhattacharya, Gujarat Finance Minister Kanubhai Desai, Karnataka Revenue Minister Krishna Gowda, MP Deputy CM and Finance Minister Jagdish Devda, Tamil Nadu Finance Minister Thangam Thennasuru and Uttar Pradesh Finance Minister Suresh Khanna are included in the panel.

After initial discussions on this matter, it was decided in the 54th GST Council that a GoM will be formed which will discuss the matter in detail and bring a proposal in this matter. Which will be considered further. The GoM will consider whether the compensation cess being imposed after the payment of back to back loans taken to help the states should be continued or it should be included in the higher tax slab. The GoM will also consider what to do with the additional cess collection left after the payment of loan and interest. According to the 54th GST Council, the payment of loan and interest will be completed by January 2026 and an additional collection of Rs 40 thousand crore can be done by March 2026.