GST: Centre nods for Additional Cess for Kerala Flood Relief

Kerala Floods- GST Cess - Calamity Tax Taxscan

The Goods and Services Tax ( GST ) may introduce a new cess for the flood-affected Kerala, Kerala Finance Minister Thomas Isaac tweeted.

Finance Minister Arun Jaitley has proposed additional cess on select commodities under the Goods and Service Tax regime to raise funds to help Kerala tide over the damages caused by floods, the state minister said.

The 30th GST Council, on Friday will discuss the proposal in detail.

The issue regarding additional cess for funding rehabilitation activities in flood-hit Kerala was discussed on Thursday at a meeting between Isaac and Jaitley.

Isaac has also pressed for additional funds from the Centre to rebuild the state, which is estimated to have suffered a loss of Rs 20,000 crore (as per a preliminary estimate).

The initial proposal of the Kerala Government that it should be allowed to raise funds by imposing cess on sale of goods and services under GST by the state government did not find favour with the Union finance minister as it could complicate the whole structure of the new tax regime—which is one nation, one tax.

With this, the government may have to amend the GST law to permit imposition of a new cess in the new indirect tax regime. The GST subsumed all cess, surcharge and local levies.

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