hear the news
Expansion
The government has decided to extend the GST compensation cess till March 2026. The collection of GST cess was to be abolished on June 30, but the government has extended it to 4 years in view of the shortfall in revenue collection in the last 2 years and for payment of dues and loans of compensation given to the states in the 2nd financial year. And decided to go ahead. According to the media reports, this information has been issued by the Union Finance Ministry.
Let us tell you that GST Compensation Cess is levied on expensive goods and non-essential goods, now this cess will be charged in March 2026. The purpose of the government behind levying this cess is to compensate for the loss in revenue so that the loans taken during 2020-21, 2021-22 can be ensured.
The central government had released Rs 1.1 lakh crore by raising borrowings in the financial year 2020-21 to compensate for the fall in cess collection, while in the financial year 2021-22, an amount of Rs 1.59 crore was released to the states by borrowing it. . In such a situation, many states had asked the central government to continue with the Compensation Cess system, because the closure of the compensation system would lead to a shortage in their revenue.
It is noteworthy that after the implementation of GST, the Compensation Cess system was implemented to compensate for the revenue loss of the states, but this system was done only for 5 years from the beginning, thus it was to end on 30 June 2022. However, now in view of the interests of the states, the government has decided to extend the deadline for removal of compensation cess till March 2026. Let us tell you that the Central Government has paid the GST Compensation Cess payable till 31st May 2022 to the states.