GST Council Proposes Calamity Cess for AP Relief

The GST Council is considering Andhra Pradesh's proposal for a 1% calamity cess on luxury goods to fund disaster recovery. A group of ministers (GoM) will examine the plan, following the precedence set by Kerala in 2019 after severe floods.

The GST Council has taken a significant step towards addressing the financial challenges faced by Andhra Pradesh following recent floods. In a recent meeting, the council agreed to form a group of ministers (GoM) to explore the feasibility of a 1% calamity cess on luxury goods.

This cess proposal, championed by Andhra Pradesh Finance Minister Payyavula Keshav, aims to provide the state with essential resources to aid recovery efforts post-disaster. Minister Keshav expressed confidence in the consensus reached by the council, highlighting the necessity of the levy on luxury items as a state-specific tax.

The GST law already permits special taxes during natural disasters, as seen in Kerala's similar initiative in 2019 for flood rehabilitation. A previous GoM approved a comparable levy, setting a precedent for Andhra Pradesh's current request.