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Centre Extends GST Compensation Cess Until March 2026

The extension of the cess will assist in repaying the special borrowings for the last two years. As of 1 July this year, the GST compensation will not be provided to the states

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The central government on Saturday extended the goods and services tax (GST) compensation cess to March 2026. A gazette notification issued by the Finance Ministry on 25 June 2022 confirmed the extension.

As a result of borrowings and arrears of compensation paid to the states over the last two years, the companies are required to levy a GST compensation cess on certain goods and services until March 2026. 

In an attempt to get the states on board, with the nationwide rollout of the consumption-based tax which absorbed most state-level levies, the centre had assured an annual GST revenue growth of 14 per cent over a period of five years. 

The extension of the cess will assist in repaying the special borrowings for the last two years.  As of 1 July this year, the GST compensation will not be provided to the states. 

Next week, GST Council will meet in Chandigarh.



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