New avatar likely for GST compensation cess
The goods and services tax (GST) compensation cess expiring in March 2026 or before may be replaced with a new levy, if the GST Council feels more revenue is needed, two officials aware of discussions between the Centre and states said.
The cess, which is levied on products in the 28% GST slab such as aerated drinks, tobacco and automobiles, was meant to compensate states for their revenue losses in the first five years of GST till June 2022. It was extended till March 2026 to repay a Rs. 2.69 trillion debt raised by the Centre when the cess collection was not sufficient to pay the states during the pandemic years.
