The Centre and states are close to agreeing on folding the GST compensation cess within the broader goods and services tax (GST), two people aware of discussions in the government said. The two sides are also close to reaching an agreement on how to utilize the surplus cess collected, likely by dividing between them.

       Without a decision on its future, the compensation cess levied on luxury goods and tobacco, which is expected to fetch ？1.67 trillion this fiscal year, clocks out at the end of March next year after an eight-year run.

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