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GST compensation levy
September 3 , 2025
16 hrs 0 min
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- In the Goods and Services Tax (GST) Council meeting on September 3 and 4, a group of eight non-BJP ruled States have proposed a cess to be levied on sin and luxury goods over and above the proposed 40% GST rate.
- Without such a cess, the revenue losses from the Centre’s proposed rate rationalisation hamper at least 15% of their expenditure on development.
- The Centre has proposed removing the 12% and 28% tax slabs and moving the vast majority of items in these slabs to 5% and 18%, respectively.
- It has also proposed a 40% rate for a few sin and luxury items.
- Assam, Chhattisgarh, Gujarat, Madhya Pradesh and Uttar Pradesh favour the proposal to allocate a GST rate without an additional tax.
- West Bengal, Tamil Nadu, Punjab and Karnataka support the continuation of cess via an additional levy.
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