The Kerala government will not be able to go ahead with its plans to collect 1% flood cess from next week. State finance minister Thomas Isaac had been counting on garnering Rs 600 crore in the current fiscal through flood cess for rebuilding the state’s infrastructure ravaged by the devastating floods of 2018. The GST Council had in-principle cleared the Kerala government’s plea for levying a 1% flood cess, but the state is yet to receive the official ratification papers from the Union finance ministry. Without this, the state cannot go ahead with cess collection from July 1.
“The delay is because the finance ministry is busy with the Union Budget exercise. Even if the ministry order lands by July end, Kerala may not be able to implement it from August 1 since the software systems of trading community across the state need to be put in sync with the new tax format,” a senior state finance department official told FE.