Q.1 What is the rate of Kerala Flood Cess?

Ans: The rates of Cess are as follows:

Goods taxed at the rate of 1.5% KGST-0.25% Cess

Goods taxed at the rate of 6%,9% and 14% KGST-1% Cess

All services under SGST-1% Cess

Q.2 What are the types of supply which would attract Kerala Flood Cess?

Ans: All the taxable persons who engage in the supply of goods or services where the place of supply and the location of the supplier is in the state of Kerala. In other words, Intra-state Supply in Kerala would attract Kerala Flood Cess.

Q.3 Who are required to pay the Kerala Flood Cess?

Ans: All taxable persons (registered persons and those who are liable to get registered) shall pay a cess for the intra-state supply of goods or services, where the recipient is an unregistered person. He shall show the cess collected separately on the invoice and shall pay it to the Government.

However, the following category of persons need not pay Kerala Flood Cess:

i. Those registered persons who have opted to pay tax under the composition scheme u/s 10 of the KGST Act

ii. Those taxable persons providing exempt supplies under the notification issued u/s 11 of the KGST Act.

Q.4 On what value should the cess be paid?

Ans: The cess shall be paid on the taxable value of supplies made by the taxable person to the unregistered person.

For Eg: Mr. A, a registered person dealing in goods chargeable at 6% KGST sells to an end consumer being an unregistered person goods for Rs. 1,000/-.

The total amount payable by the recipient would be:

Particulars Amount
Basic Price of the Goods 1,000
[email protected] 9% 90
[email protected] 9% 90
Kerala Flood Cess @ 1% 10
Total 1,190/-

Q.5 What is the mechanism for discharging the Kerala Flood Cess?

Ans: The registered person shall deposit the cess along with the return for the cess within the due date for filing GSTR-3B(being 20th of the immediately succeeding month). The amount shall be paid by getting a one-time user-id and password from the official portal ‘www.keralataxes.gov.in” and e-payment shall be made.

Q.6 Is there any specified reporting applicable for the Kerala Flood cess?

Ans: Return shall be filed in Form No. KFCA-A on or before the due date for filing GSTR-3B(being 20th of the immediately succeeding month).

Q.7 Do I get credit of the Kerala Flood cess paid?

Ans. No credit is allowed on the cess paid as the same is levied on transactions between the unregistered end consumers and the taxable persons. B2B transactions are not covered in Kerala Flood Cess.

Q.8. Can I get a refund of the Kerala Flood Cess?

Ans: Refund is not allowed of the cess paid to the Government.

Q.9 When is this cess applicable?

Ans: The Rules shall become applicable from 1st July 2019. Hence, transactions taking place on or after 1st July 2019 shall be subject to cess as well.

Q.10 Till what date is the cess applicable?

Ans: This cess is applicable for a period of two years i.e. till 31.06.2021.

Comments on the Kerala Flood Cess

The Rules could have been better drafted taking powers from section 9 of the KGST Act as well instead of plainly drawing powers from the Kerala Finance Bill, 2019. Nevertheless, this would not affect the validity of the Rules and the right to tax the goods and services. What has to be seen is the time that it would take for this new levy to settle down and be absorbed under the routine GST process. Extreme caution has to be exercised by the taxpayers while raising invoices to the customers who deal with both B2B and B2C transactions, as any folly on a B2C transaction would create a hole in registered person’s pocket.

We all hope that this increased levy would fuel the rebuilding of Kerala.

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January 2021