Kerala had asked the GST Council for levying cess to fund rehabilitation work.
New Delhi: Bihar deputy Chief Minister Sushil Modi- headed ministerial panel on Sunday gave its nod for levy of 1 per cent ‘calamity cess’ under GST by Kerala for a period of two years to fund rehabilitation work in the state hit by floods.
It has also recommended to the GST Council to allow additional borrowing over the permitted limit by states hit by natural calamity.
It was suggested that goods and services, which will attract the 1 per cent cess, would be decided by Kerala. If any other state wants to levy the ‘calamity cess’ it has to approach the GST Council for approval.
The GST Council which is scheduled to meet on January 10 will discuss on the recommendations of the ministerial panels.
“Kerala had asked the GST Council for levying cess to fund rehabilitation work. The GoM has recommended to the Council that Kerala be allowed to levy 1 per cent cess for two years. Also the Centre and states will together decide on increasing the borrowing limit under FRBM for funding natural calamity,” Mr Modi said after the meeting of the GoM.
In September, GST Council had decided to set up a seven-member panel to examine the legality of imposing a new tax on certain goods and services to raise resources for natural calamity-hit states.