The Goods and Services Tax (GST) Council is yet to get a formal proposal from the government of Kerala for a cess to fund post-flood rehabilitation.

Thomas Isaac, the state’s finance minister, had said he would be doing so, with a request for permission to levy one on the State GST (SGST). The latter, he had argued, was purely an intra-state tax and so, “there is no logic in denying (such a request). We want to have a 10 per cent cess on SGST, which I think will get us some Rs 10 billion”, he had said.

On how the Council would respond, Bihar deputy chief minister Sushil Modi said if this was legally possible under the GST Act or rules, they would okay this, for a limited period. 

“Another state might face a calamity tomorrow and the cess could help. But, the Council cannot go against the constitutional amendment (on this matter). We will discuss it,” he had added. 

The said amendment to enable GST does empower the Council to impose a special rate or rates for a specified period, to raise additional resources during any “natural calamity or disaster”. It is unclear if this means a raising of rates or also allows a cess.

There was an earlier controversy regarding a cess on sugar. A case on this is before the Supreme Court and the Union attorney-general is still to give his opinion. The proposal had come from the Union government, to help growers and the industry. Isaac had argued that the Centre could, then, logically not object to his proposal.

 

 

Source: Business Standard

 

 

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