GST Council may meet in early July ahead of Monsoon Session of Parliament

Following a gap of over six months, the Goods and Services Tax Council is likely to meet in early July ahead of the Monsoon Session of Parliament. According to sources, while the Council was originally slated to meet in June, it is now likely to meet in July given the heavy agenda before it.
 
A formal date of the GST Council meeting is yet to be announced and the agenda is also expected to finalised subsequently.
 
However, sources indicated that issues around rationalisation of GST rates as well as the future of the compensation cess are likely to be part of the agenda. With increasing calls for simplification of the tax, a separate taskforce of state and Central officials could also be set up.
 
According to sources, the discussion on the compensation cess will be a key issue given that it is set to end in March 2026. The cess could possibly be turned into a tax levy with concerns from certain states that a cess would directly go to the Centre.
 
The Group of Ministers on the compensation cess is also understood to have supported merging the cess with GST rates, which would be applicable on the current items that attract the cess such automobiles, tobaccos and aerated drinks.

“All states are in favour that the cess should continue in some form or the other due to revenue considerations,” explained the source. An enabling amendment to the GST law will have to be made to continue the cess in the new form.
 
However, discussions on a significant rate rationalisation under GST could take longer as there continue to be concerns amongst various states on the impact on revenue of such a move.
 
The Union finance ministry has also been taking views from various stakeholders including industry chambers on changes to be made in GST. Union finance minister Nirmala Sitharaman is also set to meet officials of the Central Board of Indirect Taxes and Customs on June 20 when she is expected to get more feedback on the on ground challenges being faced for GST.
 
The GST Council had last met on December 21, 2024 in Jaisalmer and expectations have been that it would meet soon to take up these key issues.