States such as Punjab have demanded detailed discussions on adjusting for the loss and whether compensation will be provided, though no alternatives were discussed at the meeting. The cess, levied to compensate states for GST rollout-related losses, is set to expire on March 31, 2026.
Meanwhile, the finance ministry has said that the Central government remains committed to building a broad-based consensus with the States in the coming weeks to implement the next generation of GST reforms in the spirit of cooperative federalism.
Union Minister of State for Finance Pankaj Choudhary, the Chief Minister of Goa, the Deputy CM of Bihar, and finance ministers from West Bengal, Punjab, Kerala, and Gujarat attended the GoM meetings on insurance and cess.
The GoM on rate rationalisation will meet on August 21 in New Delhi.
In a big overhaul of the GST structure, the government has proposed a two-rate – 5% and 18% — structure and do away with 12% and 18% rates. Under the proposed plan, sin and luxury goods would be taxed at 40%.