GST compensation: Punjab raises concerns about income losses, looking for clarity from GOM

The issue of compensation and the need to replace the States at a meeting of the goods and service tax (GST) on Wednesday at the GST Council (GOM) meeting on Wednesday. Punjab Finance Minister Harpal Sing Cheema, a member of a member of the compensation compensation, said that the loan payments made during COVID via CESS collections are expected to end in October. He also pointed out that while GOM was expected to come up with an alternative mechanism to prevent losses in income to the states, it did not. He said Punjab had about 21,000 rubles a year after the implementation of GST.

According to a proposal from the Ministry of Finance, compensation will be reimbursed with 40 % tile for certain blue forms, including tobacco, Pan Masala, online gaming and large cars. They showed that only five to seven products can be applied.

The compensation is expected to end by March 2026, while the loan repayment will be completed by January 2026. Gom examines what happens to CESS after the date of the sunset.

Many states have previously raised concerns about potential income losses due to GST rationalization under GST and have stated that they consider the continuous compensation.

Cess was introduced together with GST to compensate for states from potential income losses based on guaranteed 14%annual revenue growth over the first five years. It ended on June 30, 2022, but it continued until March 2026 because the states had to borrow during the Covid-19 pandemic because they could not be paid for in income losses. Cess is set to end by March 2026. Gom was founded to investigate what happens to CESS after its sunset date.