Cess on luxury items is crucial for Punjab’s revenue: Cheema

Punjab finance minister Harpal Singh Cheema on Wednesday emphasised the need to continue the GST compensation cess, considering the state’s financial position and current GST structure

Chandigarh: Punjab finance minister Harpal Singh Cheema on Wednesday emphasised the need to continue the GST compensation cess, considering the state’s financial position and current GST structure.

Punjab finance minister Harpal Singh Cheema. (HT File)

At a video conference of Group of Ministers (GoM) on restructuring compensation cess, Cheema said that the cess levied on sin goods and luxury items with inelastic demand is crucial for Punjab’s revenue. He also highlighted the importance of self-reliance among states in generating taxes.

Regarding excess cess collection, Punjab proposes distributing it among states based on a proper mechanism that ensures equitable distribution to states in need. “This will strengthen the federal structure and make states self-reliant,” Cheema added.

The finance minister also focused on identifying the states that need such compensation and deciding parameters aimed at equitable distribution of cess proceeds to these states.