Opposition-Ruled States Demand Extension Of GST Compensation Regime
NDTV
Finance Minister Nirmala Sitharaman had said regime of paying compensation to states for revenue shortfall resulting will end in June next year.
Finance ministers of Opposition-ruled states have demanded that the GST compensation cess regime be extended beyond June 2022.
Briefing reporters after the 45th GST Council meeting in Lucknow yesterday, Union Finance Minister Nirmala Sitharaman had said the regime of paying compensation to states for revenue shortfall resulting from subsuming their taxes such as VAT in the uniform national tax GST will end in June next year.
However, the compensation cess, levied on luxury and demerit goods, will continue to be collected till March 2026 to repay the borrowings that were done in 2020-21 and 2021-22 to compensate states for GST revenue loss.
In his speech at the meeting, Tamil Nadu Finance Minister P Thiaga Rajan demanded continuation of the compensation mechanism, and deferment of a decision on this issue.
