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Kerala Flood Cess – Rebuilding Gods Own Country

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Kerala Flood Cess – Rebuilding Gods Own Country

8th August 2018, Kerala witnessed the worst flood in the century, affecting over one-sixth of the total population of the state.

The Chief Minister of the Kerala, Pinarayi Vijayan, has estimated a sum of at least Rs. 20,000 crores would be required to bring back normalcy within the state. The Kerala government has also decided to cancel all government-funded events for a year, and use the money for flood relief instead.

With a view to reconstruct, rehabilitate and compensate the needs so arisen due to the flood, the Kerala State Government has decided to levy a Kerala Flood Cess (KFC) on the value of supply of goods or services or both for a consecutive period of 2 years, effective from 1st July 2019.

The amount collected from this Cess will be distributed to Kerala State Government only. Hence the payment need not be made through GSTR-3B instead a new form KFC-A has been introduced. The taxpayer will have to file this form on the Kerala tax Department Portal (keralataxes.gov.in) instead of the GST Portal. Although the due date of filing KFC-A is the 20th day of the subsequent month, it needs to be filed before the filing of GSTR-3B.

Multiple rates of KFC are as follows:
Nature of Goods Rate of CESS
Goods taxable @ 3% GST 0.25% 
Goods taxable @ 5% GST Nil
Goods taxable @ 12% GST 1%
Goods taxable @ 18% GST 1%
Goods taxable @ 28% GST 1%
All taxable Services 1%
KFC need not be charged in the following cases:
  1. If the sale of goods or services or both are inter-state supplies.
  2. If the goods or services are sold at Nil rated or they are of exempted category.
  3. If goods or services are sold to composite taxpayers.
  4. Supplies of goods or services or both by a registered person to another registered person.
  5. Goods which attracts 0.125% SGST, i.e. diamonds and precious stones etc.
In case there is any delay in payment of KFC then 18% interest will be charged. It will be applicable from the due date of payment until the actual date of payment.

Quick Points
  • Kerala Flood Cess (KFC) will be applicable from Jul 1, 2019, for a period of 2 years.
  • For the payment of KFC, a new form KFC-A will be introduced on the Kerala tax Department Portal.
  • KFC will be charged on the taxable value.
  • KFC is liable to be paid only by registered persons if they make any sale to an unregistered person.
  • The invoice should clearly state the amount of KFC charged.
  • The Kerala Government will check whether the Place of Supply in form GSTR-1 (i.e. 29) and first two digits of the GSTIN match in form KFC-A.
For any queries, feel free to connect with us at support@irisgst.com.

About Bhavika Chothani

Bhavika

Bhavika is Customer Success Manager for IRISGST at IRIS Business. An ICWA, Bhavika comes with approx 9 years of experience in Compliance Reporting. She has been handling clients in Indian Markets since the GST mandate and has profound expertise in product functioning, GST filing and issue resolution. During leisure time, she loves traveling and likes to explore new places.

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