The Kerala flood cess rules 2019 shall be implemented from 01st August 2019 onwards for two years i.e till July 2021.  As per the aforesaid Rules read with the amendments thereon, the Kerala flood cess (KFC) shall be imposed at the rate of 1% and/or 0.25% on the following local outward supplies (Intrastate outward supplies) made to B2C customers/Ultimate customers not having GST registration /unregistered persons, by the persons registered under the Kerala GST Act except for composition dealers of goods and services.

Local outward supply KFC Rate
(1) All goods attracting GST @ 3% 0.25%
(2) All goods attracting GST @ 12%, 18% and 28% 1%
(3) All services. 1%

Various Compliances under The Kerala flood cess rules 2019 are as follows:

1, The KFC shall be levied and collected separately on the taxable value of supplies (Taxable value of supply shall not include Discount, GST and GST compensation cess) made from 1st August 2019 onwards.

2, The CGST and KGST shall be levied and collected on the same taxable value on which Kerala Flood Cess imposed.

3,The KFC shall be shown separately in the invoice in addition to KGST and CGST.

4, The KFC so collected shall be paid to the Kerala Government on a monthly basis by filing separate E-Form KFC-A through the official portal ‘’ www.keralataxes.gov.in” on or before the due date of filing of GSTR-3B.

5, One-time user ID and password shall be generated from the portal  www.keralataxes.gov.in for paying the above cess and filing E-Form KFC-A.

6, The KFC once paid shall not be refunded.

The Kerala Flood Cess (KFC) is not applicable to the following type of outward supplies:

1, All the Supplies made by composition dealers of goods and services.

2, All the Supplies made between dealers registered under GST, So there would not arise any question on the credit of KFC paid on inward supplies.

3, All the Local outward supplies of goods attracting GST @ 5 %.

4, All the Local outward supplies of goods attracting GST @ 0.25 %.

5, All the Interstate outward supplies of Goods, Services and both.

6, All type of exempt outward supplies.

Disclaimer: All the above statements are my personal views derived from the analysis of the respective acts and rules. So, I will not be responsible to indemnify the readers of this article in any manner. So, the readers have to draw their conclusion based on the careful analysis of the relevant provisions of The Kerala Finance Bill 2019 read with The Kerala Flood Cess Rules, 2019 and amendments thereon.

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Company: Sajeesh M K & Co
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30 Comments

  1. ABDUL RAHMAN says:

    a taxable person received government contract , so here what is the treatment in kerala flood cess ?
    kerala flood cess applicable or not ?

  2. Shandeep says:

    When filing flood cess taxable value was entered in (To taxable person having GST registration in the state,not in) instead of (To unregistered
    persons)…cess already paid….is there any way rectify it..

  3. ARUN says:

    Doubt related to GST 3B Table 3.1 Cess portion. Is this related to Kerala Flood Cess that we collected during August 2019? I already submitted Cess amount to Kerala GST portal. Now GST 3B also asking Cess amount by e payment. (Can i leave Table 3.1 Cess portion in NIL?)

  4. Aiswarya Akshay says:

    Sir,

    We have inadvertently file the KFC -A as nil return.But actually the cess amount is liable to pay.In GSTR 1 we have filed supply of goods or services(B2C) but wrongly filed the KFC -A return as nil .
    Whether any option to revise the return for further months or not.
    Please clarify as early as possible.

  5. sanjay says:

    Related to Airline business…

    If an ticket is issued on 01st Aug (10000Rs) & gets cancelled by 10th Aug (-10000Rs), Can we file an Net off return (100-100), as the website shows it should be filed along with the return. i understand KFC tax is non refundable across the month.
    Kindly specify

    1. Sajeesh MK says:

      Before analyzing this matter, we have to draw attention to the provisions of Clause 14(4) of The Kerala Finance Bill 2019 and Rule 7 of The Kerala Flood cess Rules 2019.

      By analyzing these provisions, it is clear that the methods, procedures, and explanations which are prescribed for filing various returns under GST (GSTR 3B and GSTR 1) are equally applicable to the returns under The Kerala Flood Cess Rules.

      So, you can follow the methods and procedures which are used in the like situation/issues while filing GST returns as neither the Kerala finance bill 2019 nor the Kerala flood cess rules have not mentioned any specific root to tackle such issues.

    1. Sajeesh M K says:

      The KFC is applicable only on supplies made by GST dealers to Non GST/ unregistered dealers. In your case, you have GST registration. Hence, you are not liable to pay KFC on any kinds of your purchases. Whereas, you are liable to collect and pay GST on taxable supplied made to unregistered dealers subject to the provisions of the flood cess rules.

  6. Anish S says:

    Sir,
    We have GST registration. But our bank is imposing KFC on every service charges. Eg. If we take a dd or send an NEFT standard charges may apply and on that charges they are imposing 1% KFC.Wheather it is correct or not?

    1. Sajeesh M K says:

      As per your communication, your bank is imposing KFC@1% on all type of service charges.

      By analysing your above issue, I am suspecting that you have not communicated your GST number to your banker till date.

      If yes, you have to immediately communicate this matter with your banker and Duly intimate your GST registration number along with the detailed list of bank charges on which KFC has been imposed so far. In addition to that, you have to ensure that the KFC already collected has been returned by the bank in the month itself as KFC once paid to the government will not be refunded in any case.

      If not, that means you have already intimated to your banker that you have GST registration, you have to give one more reminder, if possible to the bank manager also, on this matter as the banker may forgot about your status under GST.

      If your banker again notice that you are liable to KFC, please lodge a compliant before the bank manager and GST compliant cell with detailed written explanation about the issue.

  7. SURESH KUMAR says:

    HI, Good Day.

    Could you explain if I am paying 5% GST to the builder for an under construction flat, is it necessary to pay Cess ? Because builder insisting me to pay Cess 1% on compound basis.

    1. Sajeesh MK says:

      That is depends upon your status under GST. You are liable to pay cess, if you are not a GST registered dealer. whereas, if you are GST dealer in any way, you are free from paying flood cess.

      The kerala flood cess rules,2019 clearly mentioned that the supply of goods which are bearing GST at the rate of 5% are also not subject to GST.

      However, Clause 5 of Schedule II of the CGST/SGST ACT has specified that the following type of activities are to be treated as service;

      “construction of a complex, building, civil structure or a part thereof, including a complex or building intended for sale to a buyer, wholly or partly, except where the entire consideration has been received after issuance of completion certificate, where required, by the competent authority or after its first occupation, whichever is earlier”.

      Conclusion:
      By the careful reading of the above para, it is clear that the activity of builder is falls under the category of services. All services are subject to flood cess unless you should have been taken GST registration.

  8. Aswin says:

    Dear Sir,
    As per your above communication KFC is not applicable for Interstate outward supplies of Goods, Services, Is this true ?? Pls clarify

  9. Naveen S says:

    Sir,

    As per your above communication – Taxable value of supply to calculate flood cess shall not include Discount.Is this true ?? Pls clarify

    1. Sajeesh MK says:

      Sub section 3 of Sec.15 of the CGST Act, 2017, reproduced below, deals with the provision of discount, as under:

      “The value of the supply shall not include any discount which is given –

      (a) Before or at the time of the supply if such discount has been duly recorded in the invoice issued in respect of such supply; and

      (b) After the supply has been effected, if –

      (i) Such discount is established in terms of an agreement entered into at or before the time of such supply and specifically linked to relevant invoices, and

      (ii) Input tax credit as is attributable to the discount on the basis of document issued by the supplier has been reversed by the recipient of the supply.”

      The logical inference which could be drawn from plain reading of above provision is:

      1. Discount, if mentioned on the face of the invoice, can be reduced from the taxable value of the supply of goods.

      2. Discount, even if not mentioned on the face of the invoice can be reduced from the taxable value, if following conditions are satisfied:

      i) Discount is established in terms of an agreement before supply. In simple words, both supplier and recipient are aware and have agreed about the discount before the supply.

      ii) Discount is linked to a specific supply invoice.

      iii) ITC attributable to the discount is required to be reversed by the buyer or recipient of the supply.

      GST liability of the supplier would be reduced if both supplier and receiver of the goods or services are aware of the discount before supply.

      There will be no differentiation in GST between trade and cash discounts. In fact, GST segregates the discounts allowed into two categories:

      Those given before or at the time of supply, and
      Those given after the time of supply.

      1. Sajeesh M K says:

        In continuation of the first reply, read the following also;

        In addition to the above provisions of the GST Act, The Rule 7 of the Kerala flood cess rules 2019 says that the provisions of CGST and SGST ACTS are equally applicable to the collection and levy of cess under the Kerala flood cess rules 2019.

        From the above ,it is apparent that the taxable value of supply to calculate flood cess shall not include Discount subject to the provisions of section 15 of the CGST and SGST ACT.

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