New Delhi, May 24
With a focus on simplifying the indirect tax regime and addressing anomalies in the existing Goods and Services Tax (GST) rate structure, the GST Council is likely to take up rate rationalisation and the future of compensation cess in its next meeting.
The meeting in New Delhi is anticipated to be convened soon, with states also pushing for clarity on their revenue outlook ahead of the next fiscal planning cycle.
According to a report, citing sources, the issue of compensation cess — a levy initially introduced to offset revenue losses of states post-GST rollout — is also on the table, especially as its continuation beyond 2026 becomes a point of debate.
Union Finance Minister Nirmala Sitharaman in March said that GST rates will be reduced further as the process of rationalising tax slabs is nearing completion. The revenue neutral rate (RNR), which was 15.8 per cent when GST was introduced in July 2017, has now come down to 11.4 per cent in 2023 and will decrease further.
FM Sitharaman said that the work on simplifying GST slabs is almost finished and the GST Council, which is led by Finance Minister and includes state finance ministers, is expected to take a final decision soon.