Background:
As per section 14(1) of the Kerala Finance Act, 2019, a cess called the Kerala Flood Cess has been levied on the intra-state supply of goods or services or both, made in furtherance of business by a taxable person as provided for in section 9 of the Kerala State Goods and Services Tax Act, 2017 (“KSGST 2017”). Further, the Government of Kerala had notified that Kerala Flood Cess @1% would be applicable to the value of supply of goods or services, in addition to the GST payable on such goods or services.
Therefore, in regard to the above, the SGST Department of Kerala has issued a Circular No. 10/2019 dated October 21, 2019, wherein certain issues in regard to Kerala Flood Cess has been clarified, which are discussed as hereunder.
- If the recipient of the goods or services is providing the GST registration number, the supplier may not have the responsibility to ensure whether the goods or services procured are used for in furtherance of business.
- The supplies made to Government Departments and local authorities having GST registration either as Tax Payer or Tax Deductor will qualify for exemption from Kerala Flood Cess, on fulfillment of certain conditions.
- Liability to file Kerala Flood Cess Return: The taxable persons are liable to file Kerala Flood Cess Return in Form KFC-A and to pay Kerala Flood Cess.
- If the taxable persons has no supply liable to Kerala Flood Cess during a Financial Year, they are not liable to file Kerala Flood Cess Return.
- Once the taxpayer has become liable to file Kerala Flood Cess Return for a return period during a Financial Year, they have to file Kerala Flood Cess return for the subsequent return periods of the financial year.
- The taxpayers are also provided with an easy option to file ‘Nil Return’ for the return periods having no liability to pay Kerala Flood Cess.
The Complete Circular can be accessed at: http://www.a2ztaxcorp.com/wp-content/uploads/2019/11/Circular-No.-10-2019_Kerala-SGST.pdf