GST can make a major change in the current system of counseling cess. Two new levies can be replaced instead of existing compensation cess. Its first health cess and second clean energy cess can be. The new system of cess may apply to expiry the existing system on 31 March 2026. Sources who are aware of this issue told about this on the condition of anonymity.
Proposal will be considered in GST Council meeting
This proposal is a compensation cess (Compensation cess) Group of ministers (Gom) It will be sent further through. The economics of this GOM are Union Minister of State for Finance Pankaj Chaudhary. Sources said that this issue may be discussed in the next meeting of GOM. Its time has not been fixed yet. Sources said that after discussion in GOM, the GST Council will consider this proposal. The next meeting of the GST Council is expected to be held before the monsoon session of Parliament.
States were applicable for compensation for compensation cess
Companies were deployed to compensate the states to compensate the los in the revenue. The GST system came into force on July 1, 2017. It was then decided that the Central Government will compensate the damage to the states in the revenue due to the implementation of GST system. This system is going to end in March 2026. Earlier this cess was scheduled to end in June 2022. However, during Kovid, the central government took a loan to the states to compensate the loss in the revenue. The duration of this cess was extended to return the loan money.
It has been agreed to remove the compensation cess
Sources said that the proposal to remove the existing compensation cess in the Group of Ministers has been almost agreed. It is proposed to impose health cess and clean energy cess instead. The source said that Sin Goods will be applied on products such as SIN Goods. Clean energy cess will be applied on coal and luxury automobiles. It is to maintain the source of cess based revenue, which can help public health and sustainability encyclops.
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Health cess may be applied on Sin Produce
Most states are in favor of the proposal to put cess on the products, which cause damage to health. It is said that GOM will consider this for the last time before pushing this proposal. Even though the GOM has an opinion on it, it may have some constitutional obstacles in the way of implementation. The reason for this is that the GST law is not allowed to impose new cess. Therefore, to implement it, the constitution will be required to be amended.