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:
- If the sale of goods or services or both are inter-state supplies.
- If the goods or services are sold at Nil rated or they are of exempted category.
- If goods or services are sold to composite taxpayers.
- Supplies of goods or services or both by a registered person to another registered person.
- 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.
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