After a gap of over six months, the 56th Goods and Services Tax (GST) Council Meeting is expected to reconvene in early July, ahead of the Monsoon Session of Parliament. While the Council was initially scheduled to meet in June, sources indicate that the meeting has been pushed to July due to a packed agenda awaiting deliberation.
A formal date for the Council meeting is yet to be announced, and the finalisation of the agenda is still underway. However, sources familiar with the matter suggest that two major topics likely to dominate the discussions include rationalisation of GST rates and the future structure of the compensation cess.
With growing demand for a simpler tax regime, the Council may also consider the formation of a task force comprising Central and state officials to examine further simplification of the GST structure.
A crucial issue up for deliberation is the continuation of the compensation cess, currently scheduled to end in March 2026. Several states have expressed concern that the cessation of this revenue source could affect their fiscal balance. In response, there is a proposal to convert the cess into a permanent tax levy under GST. The Group of Ministers (GoM) on the subject has reportedly recommended integrating the cess into the applicable GST rates on specific items such as automobiles, tobacco products, and aerated beverages — all of which currently attract compensation cess.
“All states are broadly in favour of retaining the cess in some form, mainly due to revenue considerations,” a source said, adding that any such move would require an enabling amendment to the GST law.
However, discussions around a broader rationalisation of GST rates may take more time. Several states remain apprehensive about the potential revenue impact of such a move, which has delayed consensus on a comprehensive rate overhaul.
Meanwhile, the Union Finance Ministry has been actively engaging with stakeholders, including industry bodies and trade associations, to gather feedback on proposed changes to the tax regime. Finance Minister Nirmala Sitharaman is expected to meet with senior officials from the Central Board of Indirect Taxes and Customs (CBIC) on June 20 to review ground-level challenges and collect further inputs ahead of the Council meeting.
The last GST Council meeting was held on December 21, 2024, in Jaisalmer. Since then, several pressing issues have piled up, raising expectations for a significant and action-oriented session in July.
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