GST flood cess in Kerala likely after Pinarayi’s Europe tour

GST flood cess in Kerala likely after Pinarayi’s Europe tour


The cess to collect funds for redeveloping Kerala, devastated by the flood in August 2018, is expected to come into force from June or July.

The finance department is learnt to have asked the government to start levying flood cess for which the Central GST council has already given its approval.

Incidentally, this comes around the time Chief Minister Pinarayi is on a two-week tour to Europe as part of an exercise to raise funds for rebuilding post-flood Kerala. He is to attend the listing of rupee-denominated masala bond of the government-supported Kerala Infrastructure Investment Fund Board (KIIFB) on London Stock Exchange on May 17.

In a rare gesture, he also invited Left wing leader in the UK Jeremy Corbyn to launch the Kerala’s offshore chit fund, another attempt by his government to attract redevelopment funds. The proposal for the flood cess over two years was made during the last State Budget. Owing to thin the last budget. The GST Council had given its nod to the state government to impose a one per cent cess on the value of goods coming under GST.

This is expected to help the government garner some Rs 600 crore. The government has estimated the loss due to flood to be more than RS 40,000 crore. The government has had very little Central Government support and its requests to get overseas funds and aid were also rejected by the Centre.

Owing to the election, the government was forced to put off implementation of the cess. According to sources in the government, the proposal will get official approval once the Chief Minister returns after the tour. This could mean the cess could come into force from June or July.