GST and compensation cess review on cards as collections fall short

If states' GST revenue does not grow by at least 14%, the Centre pays them the difference, after every two months

Under pressure to compensate states amid subdued cess collection under the goods and services tax (GST), the government is mulling revision in GST rates and compensation cess for various items.

Acknowledging that the compensation requirements of states will ‘unlikely’ be met from the cess collected, the government has written to states seeking suggestions for revenue augmentation, which may be discussed in the next GST Council meeting, scheduled to be held in the second fortnight of December.

This comes as the Centre defaulted on GST compensation to states for August and September, prompting some states, including Kerala and Punjab, to consider