Union Finance Minister Nirmala Sitharaman on Wednesday stated that the GST Council had already extended the “compensation cess” till March 2026 for helping States repay loans borrowed to make up for shortfall in GST compensation for 2020 and 2021.
She made this statement at a press conference in Bengaluru while responding to the demand that the GST compensation by the Centre that ends in June this year should be extended.
The GST Council has already extended the “compensation cess” upto March 2026 for paying the loan which was taken for all the States in 2020 for the compensation that could not be paid (by the Centre) that year and partially paid in 2021, she said.
“We had taken a conscious call in the GST Council that the Centre will borrow back-to-back and give it to the States. That amount which has to be repaid — loan taken and interest on that – would require the GST compensation cess to be extended till March 2026,” she said.
“So the amount collected from the extended cess will go towards the payment of compensation amount borrowed and interest on it,” she said.
