The Ministry of Finance vide its notification dated 24th June 2022, has published the Goods and Services Tax (Period of Levy and Collection of Cess) Rules, 2022, through which it has extended the time period for levy of compensation cess up to 31st March 2026.
The Goods and Services Tax (Compensation to States) Act, 2017 provides for compensation to states for any loss in revenue due to the implementation of GST. The Act allows the central government to levy a GST Compensation Cess on the supply of certain goods and services. The receipts from the cess are deposited to a GST Compensation Fund. The amount deposited in the Fund is used to compensate states for any loss in revenue following the implementation of GST.
Earlier the government fixed the last date for levy of GST compensation cess till 1st July 2022, however it has now been extended till 31st March 2026.
