Kerala Flood Cess (KFC) of 1 percent was announced by the Kerala Government in June 2019. This was done to deal with the flood catastrophe of 2018. There will be an additional 1 percent tax on the value of goods and services delivered, which will be levied in addition to the GST.
What was the tax all about?
Taxpayers were required to file a Kerala Flood Cess Return in “Form KFC-A” and pay the Kerala Flood Cess. On products and services subject to more than 5% GST, a 1 percent flood of cess was imposed. There was also a 0.25 percent surcharge on gold and silver, which was subject to the 3 percent GST. Moreover, ordinary dealers imposed this additional tax solely on intrastate B2C sales. Also excluded were composition dealers, interstate transactions, and intrastate business-to-business supply.
The end of the tax
Kerala’s government has announced that the flood cess would remain in place till the end of 2021. This means that from August 1, 2021, the Kerala Flood Cess of 1 percent will no longer be in effect.
If you charge 1 percent cess along with GST, you must ensure that cess is not calculated on new bills issued from August 1, 2021. The government issues a press release instructing firms to make required changes to their billing software in light of this.
