Kerala Revised Budget 2026‑27: Amnesty Schemes, Arrear Waivers and Vehicle Tax Revisions
The Revised Kerala Budget 2026‑27 introduces amnesty and arrear waiver schemes alongside major vehicle tax revisions, aiming to simplify compliance and boost registrations.
Chief Minister V.D. Satheesan, presenting the Revised State Budget for 2026‑27 in the Assembly, unveiled a set of amnesty schemes, arrear waivers, and tax revisions aimed at easing compliance and encouraging vehicle registrations. The Budget clarified the sales tax structure for low alcoholic beverages. Products with alcohol strength between 0.5% v/v and 10% v/v will attract a...
Chief Minister V.D. Satheesan, presenting the Revised State Budget for 2026‑27 in the Assembly, unveiled a set of amnesty schemes, arrear waivers, and tax revisions aimed at easing compliance and encouraging vehicle registrations.
The Budget clarified the sales tax structure for low alcoholic beverages. Products with alcohol strength between 0.5% v/v and 10% v/v will attract a 120% tax, while those above 10% v/v and up to 20% v/v will be taxed at 175%. Beer and wine are excluded, but other products in this range have been classified as “low alcoholic beverages” under amendments to the Foreign Liquor Rules.
Road tax has been reduced for certain EV categories to promote adoption. EVs priced up to ₹10 lakh will now be taxed at 3% (down from 5%), and those between ₹15–20 lakh at 5% (down from 8%). However, EVs priced above ₹40 lakh will face a higher tax of 15% (up from 10%). Other slabs remain unchanged.
Quarterly taxes on All‑India Tourist Permit (AITP) buses have been cut to encourage more registrations. The per‑seat rate has dropped from ₹2,000 to ₹900, while the per‑sleeper rate has been reduced from ₹3,000 to ₹1,500. For trailer vehicles, tax slabs have been unified: vehicles weighing more than 15 tonnes will now be charged ₹2,250 plus ₹130 per excess 250 kg, with the additional slab for vehicles above 20 tonnes removed.
Taxpayers will be given a one‑time opportunity to settle arrears related to the 1% flood cess levied on GST B2C supplies. Although the levy period has ended, substantial arrears remain, prompting the government to introduce this settlement scheme.
Arrears under pre‑GST tax laws will be waived for amounts above ₹50,000 but not exceeding ₹2 lakh. This covers assessment orders up to FY 2017‑18 under laws such as the Kerala General Sales Tax Act, Kerala VAT Act, Kerala Agricultural Income Tax Act, Kerala Tax on Luxuries Act, Kerala Surcharge on Taxes Act, and the Central Sales Tax Act. The waiver, including interest and penalties, applies to orders issued on or before March 31, 2027.
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