Kerala Govt. Issued order for collecting flood cess and it is effective from 01 Aug 2019.
The Kerala government levied a cess called the Kerala Flood Cess for two years to fund the reconstruction, rehabilitation and compensation requirements after the state was hit hard by a flash flood in August 2018.
Flood cess @ 1% on taxable amount is applicable for items under GST Percentage 12%, 18% and 28%.
Flood cess is applicable only for B2C invoices.
In January, the GST Council approved levy of cess on intrastate supply of goods and services within Kerala at a rate not exceeding 1% for a period not exceeding two years.
Insiders said the GSTN reportedly told the state government that it couldn’t handle the implementation on its network because it would have to make large number of changes to just handle Kerala-based transactions. This led to the delay.
According to the notification, every taxable person liable to pay the Kerala tax will have to file a monthly return in form number KFC A on or before the due date for filing of GSTR – 3B return specified under Kerala GST rules 2017. The return will be uploaded on www.keralataxes.gov.in and e-payment of Kerala Flood Cess shall be made along with such return.
With the imposition of this additional cess, the government is expecting to raise Rs 600 crore annually. The funds raised will be added to the Chief Minister’s Distress Relief Fund and to the re-routed loan amounts from international financial agencies like World Bank and Asian Development Bank (ADB) for financing Rebuild Kerala projects
As per the report, Kerala is the first state to impose additional cess on GST after it was implemented.
To make the impact of cess minimal, the state government has decided not to impose the additional tax on products sold by small traders, who have an annual turnover of less than Rs 1.5 crore. Importantly, the cess will be applicable only on transactions within Kerala and not interstate transactions.
The government has also decided to levy 0.25% as flood cess on gold and silver..
The GST Council has also approved the state government’s request to levy flood cess for two years. The plan to impose additional cess was first announced in the state’s financial budget. As per the initial plan, the cess was to be implemented from April 1, but it was put on hold due to Lok Sabha elections.