GST council set to convene soon; tax simplification, compensation cess likely on agenda
The Goods and Services Tax (GST) Council is expected to meet soon to deliberate on tax rate rationalisation, simplification, and the future of the compensation cess, a government source said on Thursday.
"There are three or four different aspects relating to making GST simpler. We will take up the issue of compensation cess, rate rationalisation and simplification," the source told news agency PTI.
The GST Council, chaired by the Union Finance Minister and including state finance ministers, last met in December but did not consider the reports from two Groups of Ministers (GoMs) on rate rationalisation and potential reductions in health and life insurance tax rates.
These GoMs, which proposed rate cuts and exemptions for specific sectors, are still in the process of finalising their recommendations.
Meanwhile, the GoM on Compensation Cess, led by Minister of State for Finance Pankaj Chaudhary, is examining the continuation of the compensation cess beyond its current end date of March 2026.
Currently applied to luxury and sin goods, the cess is being used to repay loans taken during the COVID-19 pandemic to offset revenue losses suffered by states.
The GoM is now assessing ways to retain the cess revenue in a revised form and how it could be shared between the Centre and the states going forward.
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