A ministerial panel allowed Kerala to levy an additional 1 percent calamity cess on the value of goods and services under the new indirect tax regimeacross all or select items for two years.
If the GST Council gives its approval, Kerala would be the first state to levy a calamity cess and set a precedent for other states.
The move to seek the council’s approval comes after Kerala sought permission for a state-specific cess to raise additional revenues for the flood-ravaged state. While the central government was not in favour of a state-specific cess, it said a time-bound national disaster cess can not only help Kerala but also be an institutionalized fundraising mechanism for such disasters in any part of the country.
The council had earlier said the cess will be structured in such a way that only a pre-determined amount will be collected within a specific time limit.