The Kerala Government has again postponed the implementation of Flood Cess on the goods and services supplied within the State to final customers to 1st August from July 1st 2019. As per the recommendation of the GST Council, the cess would be imposed for two years. A proposal to levy a disaster cess on the GST was tabled before the Council in October.
The state had originally proposed a 10 per cent cess on SGST, the tax revenue for the state from the intra-state supply of goods and services, to mobilize funds for the state’s post-flood rebuilding activities. However, the former Finance Minister Arun Jaitley put forth an alternate proposal for an all-India GST cess.
A notification issued by the State Government in June said “As per clause 14 of the Kerala Finance Bill, 2019 (Bill No.185 of the fourteenth Kerala Legislative Assembly), there shall be levied a cess called the Kerala Flood Cess on such intra-State supplies of goods or services or both made by a taxable person as provided in section 9 of the Kerala State Goods and Services Tax Act, 2017 for the purposes of providing reconstruction, rehabilitation and compensation needs which had arisen use the massive flood that occurred in the State of Kerala in the month of August 2018, for a period of two years, with effect from the date notified by the Government in the official Gazette. Now, the Government have decided to levy the Kerala Flood Cess with effect from the 1st day of June, 2019. The notification is intended to achieve the above object.”
“In the said notification, for the words, letters, symbol and figures “1st day of July, 2019”, the words, letters, symbol and figures “1st day of August, 2019” shall be substituted,” the new notification said.
There will be no input tax credit on the cess. Kerala is the first state to announce the flood cess.
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