Quick Summary
TheGST Council, meeting in New Delhi on September 3-4, is likely to consider ending the GST compensation cess by October 31, 2025, well before the official deadline of March 31, 2026, government sources indicated. The cess, originally imposed in July 2017 to offset revenue losses faced by states during the first five years of GST, was legally mandated to end in June 2022. However, it was extended until March 2026 to help the Centre repay loans raised during the COVID-19 pandemic years, when rev
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FAQ :
The GST Council is likely to consider ending the GST compensation cess by October 31, 2025.
The cess is ending early because the repayment of loans taken by the Centre on behalf of states during the COVID-19 pandemic is nearing completion, which is expected around October 2025.
The compensation cess was imposed in July 2017 to offset revenue losses faced by states during the first five years of GST, ensuring them an assured revenue growth of 14% per annum.
If the cess collection ends by October 31, 2025, any surplus collected will be shared equally between the Centre and the states.
The compensation cess was levied on items such as luxury cars, aerated beverages, and tobacco products.
The final decision will be made by the GST Council, chaired by the Union Finance Minister and comprising state finance ministers.
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