Kerala, May 28 (KNN) To raise funds to rebuild Kerala which was struck by devastating floods in August 2018, the state government will impose a cess of up to 1% on goods and services with GST slab above 5% from June 1.

The flood cess will be imposed for two years starting from June 1. However, there will be no cess on goods drawing 2.5 per cent state GST, which includes essential items such as branded wheat, edible oil etc, according to a notification issued by the Kerala government.

These items attract total five per cent GST, broken up into 2.5 per cent SGST and CGST each.

Services attracting 2.5 per cent SGST such as economy air travel will attract one per cent cess.

All other goods and services drawing 6, 9 and 14 per cent SGST would attract one per cent cess. Also, gold and silver on which 1.5 per cent SGST is there, would attract 0.25 per cent of cess. There will be no input tax credit on the cess.

As per the reports, Kerala is the first state to impose additional cess on GST after it was implemented.

The GST Council has also approved the state government’s request to levy flood cess for two years. The plan to impose additional cess was first announced in the state’s financial budget.

As per the initial plan, the cess was to be implemented from April 1, but it was put on hold due to Lok Sabha elections.