GST Council, in its 56th meeting held on December 21, 2024, decided to form a Group of Ministers (GoM) to examine the legal and structural aspects of imposing a special cess for revenue mobilization during natural calamities and disasters. The GoM will be led by Uttar Pradesh Finance Minister Suresh Kumar Khanna as Convenor, with finance ministers from Assam, Chhattisgarh, Gujarat, Kerala, Uttarakhand, and West Bengal as members. The primary objective is to assess the constitutional feasibility and policy framework for states to levy such a cess under the GST regime.
The GoM will analyze key issues such as defining criteria for classifying an event as a disaster for cess imposition, determining whether the cess should apply across sectors or be limited to specific industries, and whether it should be restricted to business-to-business (B2B) or business-to-consumer (B2C) transactions. Additionally, the committee will evaluate the potential impact of applying the cess under the Reverse Charge Mechanism (RCM) and its compatibility with inter-state tax reporting norms. The GoM will also study appropriate cess rates and the duration for which it should be levied.
A major concern under consideration is whether levying a disaster cess on SGST aligns with the “One Nation, One Tax” principle of GST. The GoM will also explore alternative funding mechanisms that could provide financial relief to states without disrupting the existing tax structure. The Department of Revenue will provide necessary secretarial assistance to the GoM in conducting its analysis and preparing recommendations.
OFFICE OF THE GOODS & SERVICES TAX COUNCIL SECRETARIAT
5th Floor, Tower-II Jeevan Bharathi, Connaught Place, New Delhi-110001
547/GOM for Revenue Mobilisation of Natural Calamities or Disaster/GSTC/2024
03-03-2025
OFFICE MEMORANDUM
Subject: Constitution of Group of Ministers (GoM) for Revenue Mobilization in case of Natural Calamities or Disasters-reg
In pursuance of the decision taken in the 56h GST Council meeting held on 21.12.2024, a Group of Ministers (GoM) is constituted to examine the legal and structural issue and recommend uniform policies on imposition of levy of cess in case of natural disasters / calamities in the State. The GoM shall consist of the following members:-
| S.No. | NAME | DESIGNATION AND STATE | POSITION |
| 1. | Shri Suresh Kumar Khanna | Hon’ble Minister of Finance and Parliamentary Affairs, Uttar Pradesh | Convenor |
| 2. | Smt. Ajanta Neog | Hon’ble Minister for Finance, Women and Child Development, Assam | Member |
| 3. | Shri Om Prakash Choudhary | Hon’ble Minister of Finance, Chhattisgarh | Member |
| 4. | Shri Kanubhai Desai | Hon’ble Minister of Finance & Energy, Gujarat | Member |
| 5. | Shri K N Balagopal | Hon’ble Minister of Finance, Kerala | Member |
| 6. | Shri Premchand Aggarwal | Hon’ble Finance Minister, Uttarakhand | Member |
| 7. | Smt. Chandrima Bhattacharya | Hon’ble Minister of Finance, West Bengal | Member |
2. The Terms of Reference (ToR) for the GoM are as follows:-
i. Examine the Constitutional and legal feasibility for levy of a special cess by States for revenue mobilization in case of natural calamity or disasters;
ii. Examine and identify the framework to be used to classify an event as a natural calamity or disaster for the purpose of levy of such special Cess by States under the GST regime;
iii. Examine whether the special cess should be restricted to some specific sectors or should be levied across sectors.
iv. Examine whether the levy of such special cess should be on B2B supplies only or B2C supplies only or both; and whether the said special cess should be applicable on supplies under Reverse Charged Mechanism (RCM), keeping in mind that taxes are not reported in inter-state supplies.
v. Examine the rate structure and time duration for which the said special cess should be levied.
vi. Examine whether levy of cess on SGST for special purpose will be in consonance of the objective of GST Act particularly “One Nation One Tax”.
vii. Examine whether any alternate mechanism can be devised for helping States in case of a natural disaster without altering the basic structure of GST.
3. Department of Revenue shall provide the necessary secretarial assistance to the GoM.
This issues with approval of the Competent Authority.
Digitally signed by Reshma R Kurup Date: 03-03-2025 18:31:56
(Reshma R Kurup)
UNDER SECRETARY
To,
The Hon’ble Members of the GoM.
Copy to:
1. PS to Hon’ble Minister of Finance, Government of India, North Block, New Delhi;
2. PS to Hon’ble Minister of State for Finance, Government of India, North Block, New Delhi;
3. The Nodal Officers of the States of Uttar Pradesh, Assam, Chhattisgarh, Gujarat, Kerala, Uttarakhand and West Bengal with the request to intimate the Hon’ble Minister regarding their nomination as Members of the Group of Minister for Revenue Mobilization in case of Natural Calamities or Disasters.
3. PPS to Revenue Secretary, North Block, New Delhi.
4. PPS to Chairman CBIC, North Block, New Delhi.
5. PPS to Additional Secretary (Revenue), North Block, New Delhi.
6. PPS to Joint Secretary (TPRU), PPS to Joint Secretary (Revenue), North Block, New Delhi.
(Reshma R Kurup)
UNDER SECRETARY
