Gov­ern­ment sets up panel on GST ‘dis­as­ter levy’ mech­a­nism

Mint Asia ST - - News - BY R EMYA NA IR & G IREESH C HANDRA P RASAD

The

gov­ern­ment on 28 Septem­ber set up a seven-mem­ber min­is­te­rial panel to study the le­gal­ity of im­pos­ing a “dis­as­ter levy” to raise funds for states struck by nat­u­ral calami­ties, such as the re­cent floods in Ker­ala.

Af­ter the 30th meet­ing of the goods and ser­vices tax (GST) Coun­cil, fi­nance min­is­ter Arun Jait­ley said it was im­por­tant to find a well thought-out mech­a­nism to raise funds for nat­u­ral dis­as­ters as it will have long-term im­pli­ca­tions.

Fol­low­ing the floods, Ker­ala had sug­gested a 10% cess on the state com­po­nent of the GST. Jait­ley said the pro­posal from Ker­ala needs to be de­cided at a high level of ma­tu­rity as it will set a prece­dence for fu­ture events.

In case the levy is im­posed by a par­tic­u­lar state, there is a risk of busi­nesses mov­ing to an­other state, said Jait­ley. “This is not some­thing that can be de­cided on the spur of the mo­ment.” Jait­ley also said that Ker­ala fi­nance min­is­ter Thomas Isaac was also on the same page, and the gov­ern­ment will have to ex­plore op­tions be­fore fi­nal­iz­ing a mech­a­nism.

A fi­nance min­istry state­ment said that Bi­har deputy chief min­is­ter Sushil Ku­mar Modi will be the con­venor of the panel, which will give its ad­vice by 31 Oc­to­ber. The panel in­cludes Isaac, As­sam fi­nance min­is­ter Hi­manta Biswa Sarma, Ma­ha­rash­tra fi­nance min­is­ter Sud­hir Mun­gan­ti­war, Odisha fi­nance min­is­ter Sashi Bhu­san Be­hera, Pun­jab fi­nance min­is­ter Man­preet Singh Badal and Ut­tarak­hand fi­nance min­is­ter Prakash Pant.

The group will look into is­sues, in­clud­ing the pos­si­bil­ity of a pan-in­dia levy or state-spe­cific

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