The panel debated extending the cess as a levy or tax or subsuming it into a higher tax bracket.The GoM panel in its first meeting earlier this month discussed treatment of GST compensation cess post-March 2026, when the current regime ends.
The panel debated extending the cess as a levy or tax or subsuming it into a higher tax bracket.
It also considered recategorising luxury goods under the 28 percent GST bracket.
High-end white goods (ACs, commercial refrigerators, dishwashers) are currently taxed at 28 percent.
The panel explored shifting these items to standard GST rates.
According to the panel, compensation cess collections used to repay Rs 2.69 lakh crore in COVID-19 loans is expected to be cleared by January 2026.
Moreover, the panel anticipates Rs 40,000 crore in compensation cess collection till Feb-March 2026.
The GoM has been tasked to decide on equal sharing of cess between Centre and states. The GoM was chaired by MoS Finance Pankaj Chaudhary.
In September this year, the Goods and Services Tax (GST) Council had set up a 10-member GoM, chaired by Minister of State for Finance Pankaj Chaudhary, to decide on the taxation of luxury, sin and demerit goods once the compensation cess ends in March 2026.
(This is a developing story, follow for more updates)
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