The Government Friday constituted a seven-member ministerial panel headed by Bihar Deputy Chief Minister Sushil Modi to examine modalities for revenue mobilisation in case of natural calamities and disasters.
Earlier in the day, the GST Council -- chaired by Finance Minister Arun Jaitley -- decided to set up a Group of Ministers (GoM) to examine the legality of imposing a new tax on certain goods to raise resources for natural calamity-hit states like Kerala.
Other members of the GoM are Odisha Finance & Excise Minister Sashi Bhusan Behera, Maharashtra Finance & Excise Minister Sudhir Murgantiwar and Uttarakhand Finance Minister Prakash Pant.
"Union Finance Minister Arun Jaitley, has approved the constitution of a Group of Ministers today to examine the issue regarding 'Modalities for Revenue Mobilisation in case of Natural Calamities and Disasters'," the release said.
To help tide over the losses suffered due to recent floods, Kerala had sought the GST Council's opinion on allowing imposition of higher taxes on goods within the state.
The panel would look into five 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.
Besides, the grouping would look at whether National Disaster Response Fund (NDRF)/ State Disaster Response Fund (SRF) mechanism is sufficient to deal with calamities as well as define circumstances where the 'calamity tax' can be imposed.
Other issues such as the legal aspect of imposition of such a tax within the GST would also be looked at.
Briefing reporters after the Council meeting, Jaitley said the GST law states that a special rate of tax can be imposed after permission of GST Council.
Isaac said the GST law provides that the Council can impose a tax for a temporary period in the GST framework to help states in terms of exigencies.
"We have not thought out the details, therefore GoM will look into it. An additional 1 per cent tax on some commodities was discussed," Isaac said.
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