The Group of Ministers formed to examine modalities for revenue mobilisation for natural calamities and disasters on Monday decided to seek views of all states on whether the cess should be state-specific or nationwide as panel members were of the view that NDRF funds are insufficient for disaster relief measures.

After the first meeting held on Monday, the panel’s head and Bihar Deputy Chief Minister, Sushil Modi, said that the panel would also seek view of the Attorney General of India on the legality of levying a cess or a tax to fund states hit by natural calamities. “The GoM has decided that the GST Council will prepare a questionnaire and send to states for response… Out of the Terms of Reference of the GoM, the Council will draft 15-20 questions. For example whether it will be state specific or it should be levied throughout the country,” Modi told reporters.

Also, the panel will discuss the funding mechanism with states, including whether or not there should be creation of a separate fund and disbursement from that fund in cases when it was decided to levy cess or a separate tax specific to the calamity-hit state. The seven-member GoM will also take up the issue for discussion with the 15th Finance Commission whose mandate includes studying the impact of GST on state revenues.

Modi said in the last 4-5 years the revenue raised through National Calamity Contingent Duty, which is a major contributor to National Disaster Response Fund, has been declining over last few years, especially after GST. “The mechanism of funding states is not sufficient in case of natural calamities disaster,” Modi said.

National Calamity Contingent Duty collections have come down from Rs 6,450 crore in 2016 17 to Rs 3,660 crore in 2017-18, he said.

The ministerial panel will now meet next in November, Modi said. The panel was initially supposed to submit its report by October 31.

The GST Council in its 30th meeting last month had broadly agreed to discuss the legality of a disaster relief levy at national level and not restrict it to one state. Kerala had demanded levy of a special cess on State GST to raise revenues in the aftermath of floods in the state.