GoM to consider cess on GST by states hit by natural calamities

Jaisalmer: Finance Minister Nirmala Sitharaman on Saturday said the GST Council decided to form a group of ministers (GoM) to consider allowing states to levy cess under Goods and Services Tax to overcome financial distress after natural calamities.

Briefing media after the 55th GST Council meeting here, she said, "Everybody agreed, even Andhra Pradesh's minister agreed that a Group of Ministers be formed and Uttar Pradesh, West Bengal, Telangana, volunteered (to be a part of it)."

The Group of Ministers will decide what this cess should be named, whether every disaster can be given a consideration. "So the Group of Ministers will decide on all these details and then the council will decide," Sitharaman said.

Earlier in the day, Andhra Pradesh Finance Minister Payyavula Keshav said that there was a consensus that a GoM be formed to look into the demand for a 1 per cent calamity cess on certain luxury goods.

"The cess will be on luxury items and state specific levy," Keshav said.

In September-October, Andhra Pradesh was hit by floods.

"To give us a leverage to come back to normalcy, we have suggested a 1 per cent cess. There was a general consensus to set up GoM," Keshav said.

The GST law provides for levy of special taxes for a specified period to raise additional resources during any natural calamity or disaster.

Earlier in 2018, the GST Council had decided to set up a GoM to look into similar demand made by Kerala.

The GoM in January 2019 decided to approve the levy of 1 per cent 'calamity cess' by Kerala for a period of two years to fund rehabilitation work in the state hit by floods. The goods and services that faced the 1 per cent cess were decided by Kerala.