Overview

• The Kerala Flood Cess was introduced by the Kerala government to offset the reconstruction, rehabilitation, and compensation demands arising from the devastating August 2018 floods.

• Though announced earlier, it came into effect from 1 June 2019, and was applied for a 2-year period.

Applicability & Rates

• It applied only to intra‑state B2C supplies—that is, sales made by registered taxpayers to unregistered persons within Kerala 

• Rates:

  • 0.25% on goods attracting 1.5% SGST (e.g., gold, silver) 

  • 1% on:

    • Services (all SGST‑taxed services).

    • Goods attracting 6%, 9%, or 14% SGST.

• Exemptions included:

  • Supplies by a composition scheme taxpayer.

  • B2B supplies (to other registered persons).

  • Goods/services that are exempted or nil-rated under the Kerala GST Act.

Compliance & Filing

• Taxpayers were required to issue invoices showing the cess separately, file monthly returns using Form KFC‑A, and remit the cess via the Kerala SGST portal (keralataxes.gov.in)—payable by the same due date as GSTR‑3B returns (typically the 20th of the following month).

• No refunds for excess cess were allowed, and the cess value shouldn't be included when computing taxable value under GST.

Duration & Withdrawal

• The flood cess was in force from 1 June 2019 to 31 July 2021.

• Kerala’s government withdrew the cess effective 1 August 2021.

Consequences of Non‑Compliance

• A Trade Circular (No. 4/2024, dated 18 Oct 2024) reminded that:

• • Outstanding cess attracts 18% interest per annum plus a penalty equal to the unpaid cess.

  • Revenue recovery actions could be initiated.

    Returns must be filed via Form KFC‑A; payment related to assessment or adjudication must go through the Kerala e‑treasury portal, not the central GST portal or DRC‑03.

Summary Table