GST Council Weighs Calamity Cess Post-Disasters

The GST Council, chaired by Finance Minister Nirmala Sitharaman, decided to form a group of ministers (GoM) to explore allowing states to impose a calamity cess under GST. This move aims to provide financial relief following natural disasters. Andhra Pradesh, Uttar Pradesh, West Bengal, and Telangana volunteered for the committee.

In a significant move, the GST Council, led by Finance Minister Nirmala Sitharaman, has opted to establish a group of ministers (GoM) to consider permitting states to impose a special cess under the Goods and Services Tax (GST) framework. This measure seeks to provide much-needed financial relief in the aftermath of natural disasters.

Addressing the press following the 55th GST Council meeting, Sitharaman disclosed that the proposal received unanimous support, including from Andhra Pradesh's minister. States like Uttar Pradesh, West Bengal, and Telangana have expressed their willingness to participate in the committee. The GoM will deliberate on various aspects, including the nomenclature and applicability of the cess for different calamities.

Earlier, Andhra Pradesh Finance Minister Payyavula Keshav highlighted the consensus for establishing a GoM to examine the necessity of a 1 percent calamity cess on luxury goods. Recalling a similar precedent in 2019 when Kerala levied a 1 percent cess for flood rehabilitation, the current proposal aims to facilitate states affected by natural calamities.

(With inputs from agencies.)