The Union Minister of State for Finance, Pankaj Chaudhary, is set to lead a newly formed Group of Ministers (GoM) tasked with addressing the GST compensation cess. This GoM will consist of representatives from various states to ensure a comprehensive approach to the issue.
The primary objective of the GoM is to review and suggest modifications to the nomenclature and management of the GST compensation cess. This cess, which is levied on demerit and luxury goods, plays a critical role in compensating states for potential revenue losses due to the implementation of GST.
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According to sources, the Terms of Reference (TOR) for the GoM, along with its membership, are currently being finalised. The GoM will be responsible for providing recommendations on how the cess funds should be allocated between the central government and the states.
Additionally, it will suggest any necessary amendments to implement these changes effectively. The 54th GST council has recommended to form 2 GoMs for GST compensation and Medical and Health Insurance GST.
Also read: 54th GST Council Meeting: Key Highlights
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