New Delhi: The Union Finance Ministry extended the deadline for the GST compensation cess levy. The deadline is extended till March 31,2026. It was supposed to end on June 30, 2022. The decision was taken by the GST Council presided over by Union Finance Minister Nirmala Sitharaman.
The compensation cess will continue to be collected from July 1, 2022, to March 31, 2026, in accordance with the Goods and Services Tax (Period of Levy and Collection of Cess) Rules, 2022. The decision was taken in order to return the loans that were obtained in the previous two fiscal years to make up for the shortfall in their revenue collection.
The Union government has borrowed and issued Rs 1.1 lakh crore in 2020–21 and Rs 1.59 lakh crore in 2021–22 as back-to-back loans to cover a portion of the shortfall in cess collection. For the borrowing in 2021–2022, the Centre has paid back Rs 7,500 crore in interest costs, and Rs 14,000 crore is still owed this fiscal year. The principal will be repaid beginning in 2023 and will continue through March 2026.