Quick Summary
The Central Government has notified a major change in the GST Compensation Cess regime, setting the compensation cess rate at "Nil" for a large number of goods listed under the Schedule to Notification No. 1/2017-Compensation Cess (Rate). The amendment has been notified by the Ministry of Finance (
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FAQ :
The nil compensation cess will come into effect from February 1, 2026.
The GST compensation cess rate will be set to 'Nil' for a wide range of goods.
The change affects numerous goods listed under the Schedule to Notification No. 1/2017-Compensation Cess (Rate), covering serial numbers from S. No. 1 up to S. No. 38, including various sub-entries.
This amendment is based on the recommendations of the GST Council.
The reduction in compensation cess is expected to lower overall GST outgo and pricing pressure for businesses and consumers, and provide compliance relief.
This move signals a continued phase-out and rationalisation of the compensation cess framework, reflecting the Centre's evolving approach as the compensation mechanism for states nears completion.
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