Next GST Council meet soon, rate rationalisation on the table

The Goods and Services Tax Council will meet soon and discuss rate simplification and rationalisation besides the future of compensation cess.

The last GST Council meeting held in December did not take up reports of the Group of Ministers on rate reduction in life and health insurance and on rate rationalisation.

These two GoMs are expected to soon submit their report to the Council with top sources saying the next meeting would consider the issue of compensation cess, rate rationalisation and simplification.

"There are three or four different aspects related to making GST simpler. We will take up the issue of compensation cess, rate rationalisation and simplification," said a senior official source.

GoM on compensation cess, currently levied on luxury and sin goods, is chaired by MoS Finance Pankaj Chaudhary.

As of today, the compensation cess is being used to repay loans taken during Covid 19 pandemic and to recover losses in GST revenues that resultantly accrued to states. The GoM is examining ways to retain revenues from the cess in some other form and see how to evolve a Centre-state sharing formula.

Senior leaders of some opposition ruled states have been questioning the Centre for delays in convening the GST Council meeting.

A source today explained that the last meeting was held in December after which the Budget exercise took up few months while the recent spell has been overtaken by events following the April 22 Pahalgam terror attack and Operation Sindoor.