GST Council has constituted a Group of Ministers (GoM) to suggest recommendations for Revenue Mobilization in case of Natural Calamities or disasters. It has reconstituted another GoM on analysis of revenue from GST.
These actions have been taken on the basis of recommendation of GST Council meeting held on December 21, 2024.
The GoM on Revenue Mobilisation in case of Natural Calamities or Disaster will have Finance Minister of Uttar Pradesh, Suresh Khanna as convenor. Besides him, members include Ajanta Neog (Finance Minister of Assam), Om Prakash Choudhary (Finance Minister of Chhattisgarh), Kanubhai Desai (Finance Minister of Gujarat). K N Balagopal (Finance Minister of Kerala), Premchandra Aggarwal (Finance Minister of Uttarakhand) and Chandrima Bhattacharya (Finance Minister of West Bengal),
The Terms of Reference (ToR) includes seven issues for recommendations. The GoM has been asked to suggest uniform policies for levying a special calamity cess in case of natural disasters in a particular state. It will examine the constitutional and legal feasibility of levy of a special cess by states for revenue mobilisation in case of a natural calamity.
Simultaneously, it would also examine whether the special cess should be restricted to some specific sectors or should be across the board. Also, whether it should be on B2B supplies only or B2C supplies only or both. entify the framework to be used to classify an event as a natural calamity/disaster for the purpose of levying such special cess by states under the GST regime.
Additionally, the GoM would recommend the rate structure and time duration for which the special cess should be levied. It is also expected to look into whether any alternate mechanism can be devised for helping states in case of a natural disaster without altering the basic structure of GST.
In the council meeting in December, Andhra Pradesh Finance Minister Payyavula Keshav demanded a 1 per cent calamity cess be levied on certain luxury goods consumed in the State. The extra revenues would be utilised towards the relief work arising out of the flood that hit the State in September-October, 2024, Keshav had said.
The GST law provides for a levy of special taxes for a specified period to raise additional resources during any natural calamity or disaster. In 2018, the GST Council decided to set up a GoM to look into similar demands made by Kerala. The GoM in January 2019 decided to approve the levy of 1 per cent ‘calamity cess’ by Kerala for 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.
GoM on Revenue Analysis
Meanwhile, the Council has reconstituted the GoM for GST revenue and revised ToR. The reconstituted GoM on ‘Analysis of Revenue from GST’ under Goa Chief Minister Pramod Sawant, would have nine members including from the states of Bihar (Samrat Chaudhary), Chhattisgarh (O P Choudhary), Gujarat (Kanubhai Desai), Andhra Pradesh (P Keshav), Maharashtra (Ajit Pawar), Punjab (Harpal Singh Cheema), Tamil Nadu (Thangam Thennarasu) and Telangana (M B Vikramarka).
The will suggest sector-specific issues that need policy intervention, and the feasibility of a unified enforcement platform to check tax evasion. As per the expanded ToR, the GoM would analyse the state-wise revenue collection trend, including the identification of revenue patterns across sectors and regions.