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Home Finance Business Finance

rewrite this title and make it good for SEOCompensation cess panel seeks time till June 2025 to finalise cess roadmap

Karishma Asoodani by Karishma Asoodani
December 15, 2024
in Business Finance
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rewrite this title and make it good for SEOCompensation cess panel seeks time till June 2025 to finalise cess roadmap
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The Group of Ministers (GoM) tasked with restructuring the Compensation Cess has requested an extension until June 30, 2025, to finalise the roadmap for the cess, sources tell Business Today TV. 

This decision follows discussions held during the 54th GST Council meeting in September 2024, where the GoM was formed to propose a replacement for the Compensation Cess after its abolition in 2026.

In its first two meetings, on October 16 and December 12, 2024, the GoM focused on two key issues: the continuation of the cess until FY 2025-26 and the distribution of any surplus funds once the cess ends. The GoM agreed that the cess should remain in place until March 31, 2026, at the current rates. Additionally, any excess collection remaining after settling outstanding loans will be split equally between the Centre and States, in line with the provisions of the GST Compensation Cess Act.

However, the GoM acknowledged that more time is required to address the constitutional, legal, and operational issues related to the post-cess phase, particularly the impact on state revenues. As a result, the panel decided to seek an extension to better analyse the situation before proposing a new course of action.

The 10-member GoM is chaired by Minister of State for Finance Pankaj Chaudhary, and includes members from Assam, Chhattisgarh, Gujarat, Karnataka, Madhya Pradesh, Punjab, Tamil Nadu, Uttar Pradesh and West Bengal. The group was tasked to submit its first report by December 31, 2024. 

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