The Group of Ministers (GoM) responsible for restructuring the Compensation Scheme has sought an extension till June 30, 2025 to finalize the exit roadmap, sources told Business Today TV.

This decision was followed by discussions in the 54th meeting of the GST Council in September 2024, the GoM was constituted to propose a replacement for the Compensation Cess after its abolition in 2026.

In its first two meetings, on October 16 and December 12, 2024, the Government focused on two main issues: the continuation of the determination through the 2025-26 financial year and the distribution of surplus funds once the determination is completed. The GoM agreed that the provision should remain until March 31, 2026, at current rates. Further, the excess collection remaining after settlement of outstanding loans will be shared between the Center and the States as per the provisions of the GST Compensation Cess Act.

However, the Government has acknowledged that more time is needed to address the constitutional, legal and operational issues associated with the post-bush phase, particularly the impact on state revenue. As a result, the jury decided to seek an extension to better analyze the situation before proposing a new course of action.

The 10-member government is headed by Finance Minister Pankaj Chaudhary and includes members from Assam, Chhattisgarh, Gujarat, Karnataka, Madhya Pradesh, Punjab, Tamil Nadu, Uttar Pradesh and West Bengal. The group was ordered to submit its first report by December 31, 2024.