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GST Council mulls ending compensation cess early
Heads up: The GST Council is thinking about ending the compensation cess about 17 months early—by October 31, 2025, instead of March 2026.
This comes as the COVID-era loans are almost fully repaid, so the legal mandate for keeping the cess in place is ending.
Potential ₹3,000 crore surplus for Centre, states
If they pull the plug on the cess ahead of schedule, there could be a ₹2,000-3,000 crore surplus to split between the Centre and states.
The compensation cess was first introduced back in July 2017 to help states with revenue losses after GST launched and got extended during the pandemic to cover shortfalls.
Now that repayments are nearly done (expected by mid-October), this move lines up with what's legally allowed under GST rules.