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Writer's pictureShubham Goyal

Clarification on Calamity Cess on GST


As per Article 279A(4)(f) of the constitution, the GST council has the power to levy any special rate or rates for a specific period to raise additional resources during any natural calamity or disaster.


Reports had earlier stated that the central government is considering a calamity cess on the GST during the COVID-19 pandemic, similar to flood cess @1% imposed by Kerala in June last year following the monsoon floods of 2018.


However, any such measure would further dampen the consumers' sentiment and could weaken markets' strength, especially when the government is endeavoring to boost consumption.


Also, internationally, no country has tried such imprudent fiddling with their existing tax regimes during the Covid crisis


Congress leader Kapil Sibal tweeted: "Even the RBI admits growth this year will be in negative territory. Don't even think of a calamity cess on the GST. That will be another calamity"

 

CLARIFICATION


Ministry sources clarifies that in the present economic scenario during the COVID-19 pandemic, the Finance Ministry is not considering imposition of calamity cess on the GST as businesses are grappling with low sales and declining demand. Also, such proposal of introducing a calamity cess would be nothing less than an adversity itself.


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