India, June 16 -- Hindustan Times reported on Monday that the next GST Council meeting is expected to consider a proposal to add two new cesses - one for health and the other for clean energy. To be sure, the proposed cesses are unlikely to lead to a hike in tax rates because they will come into effect after the existing compensation cess is done away with; the two cesses will replace the latter. While details are awaited, the idea is not very inspiring, at least in principle. Here are three reasons why.

The compensation cess was a political rather than a macroeconomic imperative. The Union government assured the states of a guaranteed 14% growth in their pre-GST revenues until July 2022 to get them to accept the rollout of GST. The comp...