GST Council constitutes GoM to advice on Kerala’s calamity cess demand for flood rehabilitation

GST Council, the highest decision-making body of Goods and Services Tax (GST) regime has decided to set up seven-member Group of Ministers (GoM) to suggest on cess demand for Kerala flood rehabilitation. It was decided in 30th meeting of the GST Council held in New Delhi. The GoM discussed proposal from Kerala to levy Calamity Tax, a special tax or cess to raise additional resources aimed at meeting  cost of reconstruction in Kerala in the aftermath of floods.

Background

Severe flooding in month of August 2018 had severely affected Kerala due to unusual high rainfall during the monsoon season. It was the worst flooding in Kerala in nearly century after great flood of 99 that happened in 1924. It had directly affected one-sixth of total population of Kerala. All 14 districts of the state were placed on red alert. Central Government had declared it “calamity of a severe nature” or Level 3 Calamity. Due to excessive rainfall, 35 out of total 54 dams within state were opened for the first time in history. All five overflow gates of the Idukki Dam were opened at the same time, for the first time in 26 years. Heavy rains also had triggered severe landslides in Wayanad and Idukki districts and had left the hilly districts isolated. It is estimated that loss and damage due to  massive flood, , is much more than 2018-19 annual plan outlay of state which stood at Rs 37,247.99 crore.

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