GST council to meet soon to discuss rate rationalisation, compensation cess future

New Delhi: The GST Council is likely to meet soon to discuss rate simplification and rationalisation and the future of compensation cess, according to a source. "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 said.

The GST Council, chaired by Union Finance Minister and comprising state counterparts, in its meeting in December last year, did not take up the GoM reports on rate rationalisation and rate reduction in health and life insurance.

The two GoMs, which recommended a reduction in rates and providing exemption to certain categories, are yet to submit their final report to the GST council.


The GoM on Compensation Cess, headed by Minister of State for Finance Pankaj Chaudhary, is looking into the future of compensation cess beyond March 2026.

As of now, the cess is being levied on luxury and sin goods but is being utilised only for paying back loans taken during the COVID to make good the loss to states in GST revenues.

GoM is now studying how to retain the revenue from cess in some other form and how it is to be shared between the Centre and the states.