GST Compensation Levy: Cars will continue to cost more till 31st March 2026

 

The Compensation Cess levy has been extended till 31st of March 2026. This effectively means it got a 45 months extension. This is despite the fact that when GST was introduced Compensation Cess was supposed to be effective only for the initial five years.

Now, even after 1st July 2022, the State Governments will continue to be compensated for revenue loss, if any, due to introduction of GST. CG may use it to repay loan/ interest earlier taken as well.

In short, consumers will continue to pay Compensation Cess and on certain goods such as car tobacco etc.

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