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Starting on February 1, 2026, the existing GST compensation cess on these “sin goods” will be replaced by a new regime featuring additional excise duties and specialized health cess.

Good News: New Excise Duties And Health Cess To Take Effect February 1, 2026

Notifications

The GST compensation cess is being removed from September 22, 2025, with the start of a new GST regime in India.

Government Scraps Compensation Cess Effective from Sept 22, 2025 [Read Notification]

The removal of GST compensation cess lowers prices for consumers but leaves businesses grappling with unused credits, old stock, and compliance costs.

GST 2.0: Compensation Cess Removed on Most Goods, Sin Goods Still Under High Tax Net

News

Punjab Finance Minister Harpal Singh Cheema urged that the GST compensation cess regime be extended beyond March 31, 2026, to allow states to offset income losses.

Punjab demands for Continuation of GST Compensation Cess beyond March 2026

The group of ministers (GoM) on GST compensation cess, led by Minister of State for Finance Pankaj Chaudhary, met to discuss the merging of the cess into GST.

GST Panel discusses to merge GST Compensation Cess into GST Slab

The Punjab FM Harpal Singh Cheema informed that the state government has received Rs.3,670 crore in GST compensation from the Centre after filing a revised claim of Rs.5,005 crore.

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Good News: New Excise Duties And Health Cess To Take Effect February 1, 2026

Government Scraps Compensation Cess Effective from Sept 22, 2025 [Read Notification]

GST 2.0: Compensation Cess Removed on Most Goods, Sin Goods Still Under High Tax Net

Punjab demands for Continuation of GST Compensation Cess beyond March 2026

GST Panel discusses to merge GST Compensation Cess into GST Slab

Rs. 3,670 Crore GST Compensation claim given to Punjab: FM Cheema