GoM Proposes Early Phase-Out Of Compensation Cess
The ministerial panel recommended to end compensation cess by Oct. 31, sources said.
The Group of Ministers, tasked to submit recommendations to the GST Council, has proposed to replace compensation cess with separate levy or to subsume it under the GST rates, sources told NDTV Profit on Thursday.
The ministerial panel has also recommended to end compensation cess by Oct. 31, the persons privy to the development added. If the proposal is accepted, then it would mark an early phase-out, as it is presently set to continue till March 31, 2026.
The GoM's final report on the cess has been submitted to the GST Council, and it will be taken up for deliberation during the meeting called by the council on Sept. 3-4, the sources added.
Notably, the cess phase-out is seen as a key step in the post-compensation framework. The GoM, led by Minister of State for Finance Pankaj Chaudhary, was tasked to review the future of the levy.
Notably, cess is imposed on select goods and services to compensate the state governments for the potential revenue losses arising after the rollout of GST regime in 2017.
(This is a developing story)
