GST Council to take up rate rationalisation issue in next meeting

A GoM headed by Minister of State for Finance Pankaj Chaudhary is looking into the future of compensation cess beyond March 2026

The next Goods and Services Tax (GST) Council meeting, for which the date will be announced soon, will take up the issues of rate rationalisation and future of compensation cess among other matters, a government official said requesting anonymity. 

“The Groups of Ministers (GoMs) have submitted their reports. There are three or four different aspects relating to making GST simpler. We will take up the issue of compensation cess, rate rationalisation and simplification (at the next Council meeting),” the official said, adding that the meeting will be held after giving states three weeks’ time, following an established norm. 

The GST Council, chaired by Union Finance Minister Nirmala Sitharaman, in its meeting in December last year did not take up rate rationalisation and rate reduction in health and life insurance. 

Bihar Deputy Chief Minister Samrat Choudhary is the convener of the GoM for rate rationalisation. The GoM on compensation cess, headed by Minister of State for Finance Pankaj Chaudhary, is looking into the future of this cess beyond March 2026. As of now, the cess is being levied on luxury and sin goods but is being utilised only for paying back loans taken during the Covid to make good the loss to states in GST revenues. 

The GoM is now studying how to retain revenue from the cess in some other form and how it is to be shared between the Centre and the States. 

On India’s growth prospects, the official said it remains intact and rating agencies and multilateral lending agencies are on the same page with minor variations in growth projections. “The predicted above-normal monsoon and robust farm output are expected to boost consumption,” the official added. 

On regulating cryptocurrency, the official said it is still a highly evolving area. “Unless there is basic agreed position among countries, no regulation will succeed,” the official added. 

On the Prime Minister’s internship scheme, the official said an increasing number of companies are showing interest in the scheme and the Cabinet will approve some changes to it based on the experience from pilot projects. The source added that under the scheme, two pilot projects have already been undertaken and industry chambers like the Confederation of Indian Industry (CII) and Federation of Indian Chambers of Commerce and Industry (Ficci), as well as companies beyond the top 500 have come forward showing increased interest in the scheme. 

“The government will bring in some tweaks in the scheme based on its experience from the pilots. It will have to be approved by the Cabinet. The Cabinet note process is on,” the source said. 

Announced in the Union Budget for 2024-25 last July, the scheme aims to provide internships to one crore youth in top 500 companies over five years. 

The top 500 companies have been identified by the corporate affairs ministry, which is implementing the scheme, on the basis of their average CSR (Corporate Social Responsibility) expenditure over the last three years. 

Council updates

  *  Meeting will be held after giving states three weeks’ time, a government official said

  *  According to the official, there are three or four different aspects relating to making GST simpler

  *  Bihar Deputy Chief Minister Samrat Choudhary is the convener of the GoMs for rate rationalisation

  *  Group of Ministers (GoMs) are studying how to retain the revenue from cess in some other form