GST Council to Form GoM on Andhra's Calamity Cess Demand

Jaisalmer, Dec 21 (PTI) The GST Council has decided to set up a GoM (group of ministers) to look into the demand for a 1 per cent calamity cess on certain luxury goods by Andhra Pradesh to raise resources to mitigate natural disaster.

Andhra Pradesh Finance Minister Payyavula Keshav said that there was a consensus that a GoM be formed.

"The cess will be on luxury items and state specific levy," Keshav said.

In September-October, Andhra Pradesh was hit by floods.

"To give us a leverage to come back to normalcy, we have suggested a 1 per cent cess. There was a general consensus to set up GoM," Keshav said.

The GST law provides for levy of special taxes for a specified period to raise additional resources during any natural calamity or disaster.

Earlier in 2018, the GST Council had decided to set up a GoM to look into similar demand made by Kerala.

The GoM in January 2019 decided to approve the levy of 1 per cent 'calamity cess' by Kerala for a period of 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.