GoM on GST permits 1% calamity cess on value products for Kerala: Thomas Isaac

Kerala Finance Minister Thomas Isaac on Monday said that the Group of Ministers (GoM) on Goods and Services Tax (GST) has agreed for one per cent calamity cess on the value of products and services, either on selected commodities or across the board for 2 years for Kerala.

"The GoM on GST has accepted Kerala's suggestion after considering various options and decided to recommend to GST council that Kerala be permitted to have 1 per cent calamity cess on the value of products and services either on selected commodities or across the board for 2 years, but it's for the Council to make the final decision," the state finance minister said.

Addressing media, Isaac said: "It was found that it won't be practical to have an all India cess for natural calamities. It will be 1 per cent cess on the value of products and services but it will be left to the state to determine whether it's across the board or on selected commodities under which the flexibility will be given."

"It should be entirely for the capital expenditure but of course it's the Central government that has to decide the additional borrowing and so and so forth," he added.

Responding to a question whether it's a Kerala specific or recommended to all the states, Isaac said: "For now, 1 per cent cess is Kerala specific and recommendation is for all the states. The cess would be on both SGST and CGST and it would depend upon the intensity of calamity of assessment of rebuilding the requirements, which will differ from state to state."

The GoM on GST on Sunday recommended that Kerala should be given the right to levy cess maximum up to one per cent for two years.

The government of Kerala had requested the Centre for relief in State GST (SGST) to generate revenue for the rehabilitation of last year's ravaging victims.

"The Centre and the state can collectively decide the borrowing limit by the state. Kerala had submitted a memorandum for the relief, which was considered and recommended for approval in the meeting," Sushil Kumar Modi, Bihar Deputy Chief Minister, told media after the meeting on Sunday.