GST: GoM to meet on Monday to discuss Calamity Tax for Kerala

GST Amendment - Taxscan

The Group of Ministers (GoM), under Bihar Deputy Chief Minister Sushil Modi, on Monday will examine the modalities for revenue mobilisation by levying additional tax under the GST in case of natural calamities as per the GST Council’s recommendation.

“The GoM on levying of tax or cess for funding natural calamity or disaster would meet on October 15,” an official told PTI.

Last month, Kerala Finance Minister, Thomas Isaac had introduced a plan for imposition of a cess on goods and services sold within the state to help it tide over the losses suffered due to the recent flood.

The 30th meeting of the GST Council has decided to set up a seven- member Group of Ministers to make suggestions on the demand for 10% cess on SGST for Kerala rehabilitation. The GoM was also entrusted to study  other options such as national disaster cess as well.

Following deliberations, the Council decided to constitute a seven-member Group of Ministers under Modi to look into the possibility of imposing a separate tax under the GST to help states hit by natural calamaties and also suggesting scenarios when this tax should be levied.

The panel would submit its report to the GST Council by October 31.

Assam Finance Minister Himanta Biswa Sarma, Kerala Finance Minister Thomas Isaac and Punjab Finance Minister Manpreet Singh Badal are part of the group.

The panel would look into five issues flagged by the Council, including whether the new tax should be levied only in the state concerned or be an all-India levy, and whether it should be on specified luxury or sin goods only.

Besides, the grouping would look at whether National Disaster Response Fund (NDRF)/ State Disaster Response Fund (SRF) mechanism is sufficient to deal with calamities as well as define circumstances where the ‘calamity tax’ can be imposed.

Other issues such as the legal aspect of imposition of such a tax within the GST would also be looked at.