Rebuilding Kerala: 10% GST cess for flood-hit state, demands FM Thomas Isaac; to approach GST Council

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Published: August 23, 2018 2:41:04 PM

With Kerala is reeling under worst flood in state's history, Finance Minister Thomas Isaac is planning to approach the GST Council for a cess to finance the relief efforts.

Rebuilding Kerala: 10% GST cess for flood-hit state, demands FM Thomas Isaac; to approach GST Council Rebuilding Kerala: 10% GST cess for flood-hit state, demands FM Thomas Isaac; to approach GST Council.

With Kerala is reeling under worst flood in state’s history, Finance Minister Thomas Isaac is planning to approach the GST Council for a cess to finance the relief efforts. He, however, said in a tweet that he will propose to impose 10% cess on SGST, which will not have any implication on revenues of other states and centre.

Thomas Isaac also said that the state has increased excise duty on liquor to mobilise funds for relief efforts. This, together with the cess, could help the state government raise Rs 750 crore. The unprecedented tragedy in the state has claimed over 400 lives and caused damage of reportedly at least Rs 20,000 crore.

Under the GST, a cess, however, goes against the spirit of the uniform taxation system. Earlier, similar arguments were made when a proposal to impose sugar cess to help ailing sugar mills was placed before the GST Council. Although, a cess can be imposed but it is subject to GST Council approval.

Meanwhile, the central government has waived GST and customs duty on relief materials arriving from overseas after some reports pointed out that they were stuck at airports due to lack of customs clearance.

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