GST Council Meet: GoM to Decide Future of Compensation Cess, Says FM
đź“… By Admin | September 10, 2024
đź“‚ Categories: GST Recent News
⏳ 4 Min Read
On September 9, the GST Council met to discuss the future of the GST compensation cess. Union Finance Minister Nirmala Sitharaman announced that the Council will create a Group of Ministers (GoM) to decide how to use a projected â‚ą40,000 crore surplus. This surplus will become available after the repayment of back-to-back loans, expected to be completed by January 2026.
The GST compensation cess initially helped states recover revenue losses from the GST rollout. The Council extended the cess to manage these loan repayments. Revenue Secretary Sanjay Malhotra emphasized the need for the Council to make a decision on the cess’s future. Since the cess’s current mandate ends in March 2026, the Council now needs to decide whether to extend, modify, or phase it out.
The GoM will evaluate different options for the surplus and recommend the best course of action. This decision will significantly impact state finances and the GST framework. Consequently, the discussions are crucial for maintaining an effective and equitable tax system.
These decisions will shape future tax policies and financial strategies. The GST Council aims to tackle fiscal challenges while balancing the needs of both state and central governments. By taking these steps, the Council hopes to adapt the tax system to evolving economic conditions and support all stakeholders effectively.
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