The Ministry of Finance (MoF) on December 31, 2025, issued an amendment to the older notification no. 1/2017-Compensation Cess (Rate), dated June 28, 2017, stating the rates of goods and services tax compensation cess under Goods and Services Tax (Compensation to States) Act, 2017.
The following has been amended, namely: -
• The amendment substitutes the Compensation Cess rate as “Nil” for a wide range of goods listed in the Schedule, covering serial numbers 1 to 38 (including sub-entries such as 1A, 5A, 6A, etc.).
• As a result, no Compensation Cess will be leviable on the specified goods which were earlier subject to cess under the Schedule.
• These changes are based on the recommendations of the GST Council and are aimed at rationalising the cess structure.
• The notification shall come into force from February 01, 2026, superseding the earlier applicable cess rates for the covered goods.
[Notification no. - 03/2025-Compensation Cess (Rate)]
