The GST compensation cess period has already been extended till March 2026.

The Union Minister was responding to a question about Karnataka Chief Minister Basavaraj Bommai’s statement seeking that the GST compensation period, which expires in June, be extended.

Union Finance Minister Nirmala Sitharaman said on Wednesday that the GST compensation cess term has already been extended to March 2026, allowing the Centre to repay loans incurred to compensate the states for the fiscal year 2020.

During a press conference here, she stated, “It’s not simply for me to answer the phone. It is up to the GST council to make a decision, and we have discussed it.”

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The Union Minister was responding to a question about Karnataka Chief Minister Basavaraj Bommai’s statement seeking that the GST compensation period, which expires in June, be extended.

Sitharaman went on to say that the GST council had already voted to extend the compensatory cess period till March 2026.

“It has already been extended to pay off the loan that was taken for all states to cover compensation that could not be paid in 2020. And, once again, which could not be partially, if not entirely, paid in 2021, “added the Finance Minister. Concerning the GST amount due to the states between 2020 and 2021, with compounded interest of 14% per year, she stated that in light of this, the central government made a conscious decision at the GST council meeting to borrow back-to-back and distribute it to the states.

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“Both the loan and the repayment, as well as the interest, will need the extension of the compensation cess until March 2026, which we have done. As a result, the proceeds from the extended cess collection would be used to repay the compensation amount borrowed as well as the interest on it “The FM elaborated. In response to the impact of the Ukraine crisis on the import of edible oil into the country, Sitharaman stated that India is searching for alternatives. “Edible oil is also an area where we have issues, and we need to figure out how to address it,” she said.

India is encouraging farmers in the north-eastern region to cultivate palm because the climate is similar to that of Malaysia and Indonesia. We have taken up the palm mission and are assisting farmers in producing palm oil in locations where palm can be grown, because we import massive amounts of palm oil, both crude and refined, she noted.