Kerala To Impose 1 Per Cent Calamity Cess On GST From June To Raise Funds For Flood Relief Work

Battered by strong 'Level 3 Calamity' floods last year, the Kerala state government will be levying a 1 per cent cess on the Goods and Service Tax (GST) beginning 1 June 2019, reports Financial Express.

The state government aims to raise funds and channel them towards restoration, reconstruction and rehabilitation of the state's ravaged infrastructure and affected people by the means of the amount collected by the cess. This makes Kerala the first state to levy a calamity cess.

It is expected that the state government will be gaining an additional fund of Rs 600 crore by this mechanism. The said cess will not be imposed on the daily items that draw 5 per cent total GST.

The calamity cess had been announced by the state government in its February budget, which was later approved by Finance Minister Arun Jaitley in January 2019 during a meeting of the GST council.

The cess will be imposed for a period of two years post which it will cease to exist.