The cess would be imposed for two years. A proposal to levy a disaster cess on the Goods and Services Tax (GST) was tabled before the GST Council in October.
As per Section 15 of CGST Act, the price of a product is inclusive of all cess. The state government notication had introduced it as price+tax+cess. But the tax has to be levied on price+cess. This will drive prices up.
Important Supreme Court Judgment Pronounced on January 30
A notification issued by the State Government last day said “As per clause 14 of the Kerala Finance Bill, 2019 (Bill No.185 of the fourteenth Kerala Legislative Assembly), there shall be levied a cess called the Kerala Flood Cess on such intra-State supplies of goods or services or both made by a taxable person as provided in section 9 of the Kerala State Goods and Services Tax Act, 2017 (20 of 2017) for the purposes of providing reconstruction, rehabilitation and compensation needs which had arisen uue the massive flood that occurred in the State of Kerala in the month of August 2018, for a period of two years, with effect from the date notified by the Government in the official Gazette. Now, the Government have decided to levy the Kerala Flood Cess with effect from the 1st day of June, 2019. The notification is intended to achieve the above object.”
APPLICATION UNDER ORDER XXXIX RULES 1 AND 2 READ WITH SECTION 151 OF THE C.P.C FOR GRANT OF AN AD – INTERIM INJUNCTION