GoM on Sikkim’s demand to levy Covid cess to meet on June 17

A Group of Ministers set up to look into Sikkim’s demand of levying Covid cess on power and pharmaceutical sectors will meet on June 17. According to an intimation notice issued by the finance ministry, the GoM created to examine the Sikkim government’s proposal to levy the cess will meet on Thursday.

Sikkim state government had proposed to levy a Covid cess at 1% of the turnover of the pharmaceutical sector for the current year and subsequent two years, up to 2022-23. It also proposed a Covid cess of Rs 0.1 per unit of power generated is imposed for the current year and subsequent years, up to 2022-23.

In 2018, a GoM set up under former GST Council member and deputy chief minister of Bihar Sushil Modi had recommended to the Council that Kerala be allowed to levy 1% cess for two years to fund rehabilitation work in the state. The Kerala government had made the request to levy the cess after the 2018 floods in the state.

Sikkim state government gave its proposals to the GST Council in order to mobilise additional resources, as the Covid 19 pandemic had impacted the overall economy and resources even as additional expenditure commitments significantly altered all the parameters of revenue and expenditure.

Revenue receipts during the current year may have a shortfall of around 30% from base estimates as outlined in the Budget for 2020-21, the state government had said in its proposal and that there may be a significant shortfall inflow of resources from the Centre, both by way of transfer of taxes from the divisible pool and also by way of grants since the rate of growth GDP is expected to nearly halve (or even less) compared to the Budget estimates of 10%.

The seven-member GoM headed by Karnataka home minister Basavaraj Bommai has been given two weeks to give its recommendations.

Other members of the GoM include Manish Sisodia, deputy chief minister of Delhi, TS Singh Deo, minister for commercial taxes in Chhattisgarh, KN Balagopal, finance minister of Kerala, Niranjan Pujari, finance minister of Odisha, Sikkim tourism and industries minister BS Panth and Uttar Pradesh finance minister Suresh Kumar Khanna.

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