GST system overhaul needed as compensation cess repayment nears 2026

The pandemic delayed a significant decision in administering goods and services tax (GST). The tax came into being in 2017 with a promise to compensate state governments for revenue losses during the first five years. The funds to compensate the states were raised by imposing a compensation cess on certain items in the highest GST bracket. In normal circumstances, the compensation cess would have ended in 2022. However, during the pandemic, which significantly affected tax collection, it was decided states would be compensated for the revenue loss through borrowing, and cess collection would be extended to repay