Finance Ministry not considering calamity cess on GST

The Finance Ministry is not considering imposition of calamity cess on the GST as businesses are grappling with low sales and declining demand, sources said. Reports had earlier said that the central government is considering a calamity cess on the Goods and Services Tax, similar to flood cess imposed by Kerala in June last year.

Ministry sources said that in the present economic scenario during the COVID-19 pandemic, any purported proposal of introducing a calamity cess would be nothing less than an adversity itself.

This would prove to be counter-productive, as sales are already at low volume and the industry is facing a deep crisis for want of demand and likely labour challenges, a source said.

“Any such measure would further dampen the consumers’ sentiment and could weaken markets’ strength, especially when the government is endeavouring its best to boost the consumption,” the source said.

Also internationally, no country has tried such imprudent fiddling with their existing tax regimes during COVID time. None of the countries, developed or developing, have increased taxes to counter economic impact of the pandemic, the source added.

Congress leader Kapil Sibal had earlier in the day 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”, he said.