Strongly Presents Case of Revenue Loss Caused By Subsumation of Various Taxes Into GST
Punjab Newsline, Chandigarh, December 2-
In a strong push for the continuation of the GST Compensation cess regime, Punjab Finance Minister Harpal Singh Cheema on Monday strongly recommended the continuation of the GST Compensation Cess regime beyond March 31, 2026, to ensure that states can mitigate the revenue loss caused by the subsumation of various taxes into GST. This recommendation was made during the Group of Ministers (GoM) meeting on Compensation Cess, which Finance Minister Harpal Singh Cheema attended via video conferencing.
Cheema emphasized that the GST Council, as per the Goods and Services (Compensation to States) Act 2017, has the mandate to recommend extending the compensation period beyond five years. He highlighted the significant and permanent revenue loss faced by Punjab due to the subsumation of the purchase tax on foodgrains into GST. This tax was a crucial contributor to the state's revenue in the pre-GST era, he added.
Cheema further pointed out that the rate of tax on goods under the Value Added Tax (VAT) regime was significantly higher than the rate applicable under GST.