A year after floods, Kerala imposes 1% flood cess to mobilise funds
The cess will be effective for two years and the state is expected to generate Rs 1200 crore, said Kerala finance minister Thomas Issac. The additional levy was announced by Issac in his budget in March.Updated: Aug 01, 2019, 19:22 IST
The Kerala government on Thursday imposed 1% cess on goods and services to mobilise additional revenue after the floods August caused large-scale destruction and claimed more than 400 lives.
The cess will be effective for two years and the state is expected to generate Rs 1200 crore, said Kerala finance minister Thomas Issac. The additional levy was announced by Issac in his budget in March.
Though the new levy will affect prices of 900 commodities, essential items like rice, vegetable and others are exempted.
The GST Council had allowed the state to impose the flood cess.
“This is the first time GST Council is allowing a state to have additional levy. After the disaster, we are finding it difficult to meet high expenditure. We hope this will help us to overcome troubles to an extent,” said Issac. He said funds will be used effectively to rebuild infrastructure destroyed in the floods.
But a section of traders observed a ‘black day’ on Thursday against the move saying it would impose additional burden on merchants.
The Kerala Vyapari Vyavasai Ekopana Samiiti, a body of traders, said the levy was a last straw and they will be forced to ask more money from customers. But Issac said strict action will be taken against those who raise prices in the name of levy.
State opposition leader Ramesh Chennithala also criticised the move. “It will result in inflation and overburden people who suffered most in floods. The government should have avoided it at this juncture,” he said. Though Kerala received excess rainfall last year this time rain deficit is around 30 per cent.