New Delhi: Traders body CAIT, on Tuesday, opposed the imposition of “calamity cess” on GST, saying that it runs contrary to the principle of “One Tax-One Nation” and “will set a wrong precedent in the country.”
The body said that at a time when the country is moving towards rationalisation of tax structure and the government is trying to ease the taxation system, any move to levy and cess/tax in any form will jeopardise the basic fundamental and spirit of GST.
Last week, the GST Council had decided to set up a panel to examine the legality of imposing a new tax on certain goods and services to raise resources for natural calamity-hit states like Kerala.
The panel will look into the issues flagged by the Council, including whether the new tax should be levied only in the state concerned or should it be an all-India levy, and that should it be on specified luxury or sin goods only.
Arun Jaitley had said that the demand to allow imposition of higher taxes on goods and services within the state to help tide over the losses suffered due to flood was considered by the GST Council and was decided that it should be referred to a Group of Ministers.
“Certainly, Kerala flood is a big calamity and Kerala should be aided adequately but it would be good if instead of levying any cess, the government may aid Kerala from consolidated fund as a non-plan expenditure,” said CAIT secretary general Praveen Khandelwal. He added, “If any such levy is imposed, on one side, the government will have to re-structure the tax and return filing system whereas on the other hand the traders will have to bring necessary changes in their system which will be cumbersome procedure.”
