Brace up for a tsunami cess

The government may impose a special natural disaster surcharge in the coming budget on the lines of the Gujarat levy. The TFC has recommended levy of special surcharges and the collection of the National Calamity Contingency Duty to replenish the outgo from the Calamity Relief Fund (CRF).

After the Gujarat earthquake in January 2001, a 2% special surcharge was imposed on corporates and non-corporates. A special surcharge to assist states and UTs hit by natural disasters — including Tsunami — could be in the offing.

The TFC has worked out the size of the CRF at Rs 21,333 crore for 2005-10 — which translates into an fund requirement of Rs 4,266 crore every year. Contributions to the CRF by the centre and the state are in the ratio of 75:25. The TFC has recommended
continuing this arrangement.

The NCCD was imposed on cigarettes, pan masala, biri and other tobacco products in 2001-02. In 2003-04, the government imposed a 1% NCCD motor cars and two wheelers and a duty of Rs 50 per metric tonne on domestic and imported crude.

Although the 1% NCCD was to be in force for just one year, it has now been extended till March 31 2005

Union territories are not entitled to relief from either the Calamity Relief Fund or the National Calamity Contingency Fund. For Tsunami hit Andaman, funds are being released from the home ministry’s budget.

The Centre had created the initial NCCF corpus of Rs 500 crore in December 2000 by levying a special 1% on corporates. Subsequently, following the Gujarat earthquake in January 2001, a fresh 2% special surcharge was imposed on corporates and non-corporates.