STOCK MARKET BSE NSE

Group of Ministers to mull allowing states to levy Covid Cess

The GoM will submit its recommendations after deliberation in two weeks.This is not for the first time that the Council is considering a state’s request to impose cess.

Published: 29th May 2021 11:06 PM  |   Last Updated: 30th May 2021 11:51 AM   |  A+A-

Finance Minister Nirmala Sitharaman

Finance Minister Nirmala Sitharaman (Photo | EPS)

By Express News Service

NEW DELHI:  The GST Council has said it will soon form Group of Ministers to examine allowing states to levy a Covid cess, especially those that have been hit by disasters and are dependent on the Centre for revenue.

The 43rd GST Council, chaired by Finance Minister Nirmala Sitharaman, sat on Friday to discuss compensation to states, the extension of GST cess beyond five years, and a reduction in GST for various Covid-related essentials, including vaccines.

Also on the agenda was the Sikkim government’s request seeking the imposition of a Covid cess on the power and pharmaceutical sector in the state for two years. 

The move was supported by other states such as Arunanchal Pradesh and Goa. Arunachal’s finance minister  supported the proposal and said  that small states should be allowed to impose a cess since they have to depend on the Centre for 90 per cent of finances.

Sikkim had said that the move would  help it mobilise additional revenues of over Rs 250 crore. 

Sources said the finance minister had assured that a a Group of Ministers (GOM) would be formed to study the proposal.

The GoM will submit its recommendations after deliberation in two weeks.This is not for the first time that the Council is considering a state’s request to impose cess.

According to the GST Act, a special levy can be imposed for a specified period to raise additional resources to cope with natural calamities or other special circumstances.

In 2018, Kerala was allowed to impose a cess of 1 per cent on the sale of goods and services in the state for a maximum of two years. 

However, experts claim that if Sikkim is allowed to levy a cess, other states will also come up with similar demand.

Many states such as Gujarat, Maharashtra, West Bengal, and Orissa have faced recent natural calamities.

The Council also rejected applying GST on Extra Neutral Alcohol (ENA). ENA is the primary input for the manufacture of alcoholic beverages for human consumption. 

GoM on Covid essentials

On Saturday, the Council announced that the GoM that will examine GST on Covid-related medical goods will be headed by Meghalaya CM Conrad Sangma, with Gujarat deputy CM Nitin Patel, Maharashtra deputy CM Ajit Pawar, Kerala FM K N Balagopal, Telengana FM T Harish Roa, Odisha FM Niranjan Pujari, UP FM Suresh Khanna and Goa transport minister Mauvin Godinho  as members.

The GoM will give its report on 8 June 2020.



Comments

Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the newindianexpress.com editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on newindianexpress.com are those of the comment writers alone. They do not represent the views or opinions of newindianexpress.com or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. newindianexpress.com reserves the right to take any or all comments down at any time.

flipboard facebook twitter whatsapp