Calamity and flood Cess Applicable from 1st July in Kerala


About Calamity and Flood Cess: The decision to levy flood cess under GST is taken in 32nd GST council meeting.  Thus, It is decided in this meeting that 1% cess will be levied on Goods and services for supplies takes place within the state of Kerala.

image for calamity and flood cess under gst

This will be called as calamity cess and will be charged over and above GST.  Similarly, the main purpose to levy calamity cess is to provide reconstruction, rehabilitation and compensation needs which arose due to massive floods occurred in August 2018.

Notification to impose calamity cess

The power to impose calamity cess has flowed from Article 279(A) (4) (F) of the constitution.   The particular clause reads as: (4) The Goods and service tax council shall make recommendations to the union and state on – (f) any special rate or rates for a specified period, to raise additional resources during any natural calamity or disaster.

GST Rate on Calamity Cess

  • Goods taxed at the rate of 1.5% = 0.25% Cess
  • Goods taxed at the rate of 6%, 9% and 14% = 1% Cess
  • All Services under Kerala GST= 1% Cess

How long the Calamity Cess will be charged

The calamity cess will be levied for two years i.e from 01.07.2019 to 30.06.2021. Therefore, this will be applicable from 01st July 2019 within the state of Kerala only.

How calamity cess will be levied

The cess will be leviable only on the supplies made within the state by registered dealers to un-registered person.  This is as per section 15 of CGST Act.  Thus, this will have the effect only on B2C Retail transactions.   GST cell will not be applicable for B2B transactions.

Further, Calamity cess will not be applicable on items that are taxable at 5% or below the rate of tax,  except gold, silver and platinum ornaments. 

A Cess of 0.25 % will be chargeable on gold, silver and platinum ornaments,  precious stones, imitation jewelry, diamonds, and other items, that fall in the fifth schedule of the GST rates.

Further, Input tax credit is allowed on the cess paid by the registered dealer to unregistered end consumers.   Also, Refund concept is not applicable under this rule.

Who shall not charge calamity cess

The composition scheme dealers are not required to charge calamity cess on their supplies. 

Kerala flood Cess Return

The GST registered person shall file a Separate monthly return in form KFC-A along with GSTR-3B.  The return to be filed on website.   However, the taxpayer needs to generate one time user Id and password for filing e-file cess return and for making payment of cess

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