GST revenues: The fate of the compensation cess amid Centre-state row

There's no reason for the cess to be retained in its current form. That's because the cess rates themselves are monstrously complicated, varying not only in magnitude but also according to end-use

In our piece yesterday, we reviewed the performance of the Goods and Services Tax (GST) over the past seven years, emphasising that the states did well but at the cost of a revenue sacrifice by the Centre. In this piece, we look ahead to consider the fate of the compensation cess.

This cess is due to be reviewed over the coming year because it has now lost its major rationale, which was to fund the temporary revenue guarantee that the Centre had provided to the states – a guarantee that has now expired. Accordingly, the GST Council’s