The ministerial panel under Bihar Deputy Chief Minister Sushil Modi on Sunday approved 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, which will attract the 1 per cent cess, would be decided by Kerala, Sushil said, adding that if any other state wants to levy the 'calamity cess' it has to approach the GST Council for approval.
Besides, the Group of Ministers under Sushil has also suggested to the GST Council to allow additional borrowing over the permitted limit by states hit by natural calamity.
"Kerala had asked the GST Council for levying cess to fund rehabilitation work. The GoM has recommended to the Council that Kerala be allowed to levy 1 per cent cess for two years. Also the Centre and states will together decide on increasing the borrowing limit under FRBM for funding natural calamity," Sushil told reporters after the meeting of the GoM.
The GST law provides for levy of special taxes for a specified period to raise additional resources during any natural calamity or disaster.
Separately, another ministerial panel under Minister of State for Finance Shiv Pratap Shukla, on giving relief to MSMEs under the goods and services tax, deliberated on the exemption threshold for such businesses. Currently, businesses with turnover of up to Rs 20 lakh are exempt from the Goods and Services Tax (GST).