GST Council To Take Up Rate Rationalisation, Compensation Cess In Next Meeting

The GST Council is expected to take up key agenda items, including rate rationalisation and the future of compensation cess, in its next meeting, a top government source said.

The meeting, likely to be held in New Delhi, is anticipated to be convened soon, with states also pushing for clarity on their revenue outlook ahead of the next fiscal planning cycle.

Sources indicated that the government is focused on simplifying the indirect tax regime and addressing anomalies in the existing GST rate structure.

The issue of compensation cess — a levy initially introduced to offset revenue losses of states post-GST rollout — is also on the table, especially as its continuation beyond 2026 becomes a point of debate.

On the Supreme Court’s verdict in the JSW-Bhushan Steel case, sources clarified that while the judgment has raised procedural questions, it does not undermine the robustness of the Insolvency and Bankruptcy Code (IBC) framework. “The court has acknowledged that the system’s execution had gaps, but this does not reflect on the law’s intent or structure,” a senior official said, adding that no final decision has been taken yet on filing a review petition.

Commenting on the US immigration bill often dubbed the “Big Beautiful Bill,” officials acknowledged that it could have an impact on remittances but added that no formal assessment has yet been made regarding its dent on total inward flows. “It’s certainly a factor we’re watching, but we’ll need more data before drawing conclusions,” the source added.

On the broader economic outlook, government officials expressed confidence, stating that all major rating agencies are aligned in their positive assessment of the Indian economy. Sectors linked to consumption are showing strength, buoyed by expectations of a good monsoon. “All indicators, barring a few, suggest favourable monsoon patterns,” a source said.