To help the states hit by natural calamities, a panel of state finance ministers decided to intend a ‘disaster cess or tax‘ under the goods and services tax (GST) and decided to get the reply of all the states on this matter.
The panel noticed that to fund natural calamities, the National Disaster Relief Fund (NDRF) was not enough, so, took the matter of a state-specific or nationwide ‘disaster tax or cess’ to all the states.
To fund states hit by natural calamities, the panel will get the views of the attorney general on the legitimacy on charging a ‘disaster cess or tax’, said by Sushil Modi, Bihar deputy chief minister, who leads the seven-member group of ministers.
Forcing of cess/tax on GST on goods which sold within the state to help the people over the losses suffered due to the recent floods, for this, Kerala has suggested a plan in the GST Council. Whenever the calamity-hit state starts applying additional cess or taxes to recover the losses, there must be a mechanism to collect and distribute such funds to appropriate allocations, such as the main focus of panel ministers with the states.
From the last 4-5 years, the savings of National Calamity Contingent Duty (NCCD) is contributed to NDRF, has been refused after execution of GST previous year, said Modi. The collection of NCCD has come down from Rs 6,450 crore in 2016-2017 to Rs 3,660 crore in 2017-2018.
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“Already there is the section in the Constitution Amendment Bill itself which says, GST Council shall make recommendations to the union and the states on any special rates or rate for a specified period to raise resources at the time of natural disaster,” Modi said.
