How to Calculate Kerala Flood Cess?

The Government of Kerala has been given the green flag for levying 1% Kerala Flood Cess on goods and services transacted within the state. By doing so, Kerala will be the first state to enact a calamity cess. The aim of levying a calamity cess as such is rebuilding, reconstructing and rehabilitating of the flood-affected Kerala. The disaster cess is expected to come into effect from July 1, 2019

Even though people are aware of the news, there are lots of speculations doing the rounds about how the Kerala Flood Cess is going to be calculated. This article provides you with a clear-cut idea of how the Kerala Flood Cess will be levied on the goods and services consumed.

Kerala Flood Cess is Calculation

The basic KFC equations on which calculations are made are illustrated belwo:

Taxable Value = Basic Rate-Discount (if any)

Total Value of product would thus depend on:

Value
GST (i.e. Taxable Value X GST Rate)
KFC (i.e. Taxable Value X KFC Rate)

i.e. Total Value = Value + GST + KFC

KFC is determined based on the taxable value of a product or service. Let us consider the following example for better understanding:

Particulars	Amount without KFC	Amount after KFC
Assumed Taxable Value	1000	1000
KFC @1%	-	10
Taxable Value for GST	1000	1000
CCGST @9%	90	90
SGST @9%	90	90
Total Cost	1180.00	1190.00

What is the Due Date of Kerala Flood Cess?

The government of Kerala has extended the last date for filing KFC return for the period of February 2020-May 2020 on grounds of the global pandemic. The notification issued on June 29, 2019 had implemented KFC in tax structure with effect from August 1, 2019.

Another notification was issued on May 25, 2019 had further notified that the due date for GSTR 3B return shall also be applied for KFC return as well. The taxpayers are mandated to file KFC return on or before 20th of the succeeding month.

What are the Compliances under KFC?

From August 1, 2019 taxpayers shall be levied with KFC and collected separately on the taxable value of supplies. Taxable value of supply shall not include discount, GST, or compensation cess.
CGST and KGST shall be levied and collected on par with KFC’s taxable value
Apart from KGST and CGST, KFC should also be shown separately in invoices
The KFC shall be collected and submitted monthly to the Kerala Government through E-filing of KFC-A which is available in Kerala Taxes official portal and should be filed before GSTR-3B due date. User ID and password are one-time in nature and shall be generated from this portal for the purpose of paying cess and E-filing KFC-A
KFC once paid shall not be refunded.

Who is exempted from the Kerala Flood Cess?

Section 14(1)((iii) of Kerala Finance Act, 2019 exempts a taxable person in the state who makes supply of services or goods or both made in business furtherance to another taxable person having GST registration in the state for business furtherance.
Supply made to the persons who have TDS registration (as per Section 24(vi) and Part 3 of the Government functions). This means supply made to GST registered Government Departments and local authorities either as tax payer or tax deductor will be exempted from KFC.