NEW DELHI: The government on Saturday notified the extension of goods and services tax (GST) compensation cess under 28% slab until March 2026.
The compensation cess levy was to end in June but was extended to enable states/UTs to repay the loans they had taken in the past two years. The extension has been given on the recommendation by the GST Council as many states incurred losses in the past two years during Covid pandemic.
September last year in Lucknow, Finance Minister Nirmala Sitharaman had said the scheme of paying compensation to states for revenue shortfall due to GST implementation will end in June 2022. However, the cess, imposed on luxury and demerit goods, will continue to be garnered until March 2026 to repay the borrowings done in FY 21 and FY22.