A flood disaster cess has been introduced, movie ticket charges and liquor tax have gone up, while service tax for service producers and stamp duty on deeds have been cut down.

Kerala Budget Whats become cheaper and costlier
news Budget Thursday, January 31, 2019 - 18:02

People in Kerala will now pay a one per cent additional flood disaster cess on all items falling under the 12, 18 and 28 per cent GST slabs for the next two years, Kerala Finance Minister Thomas Issac said on Thursday while presenting the budget.  

Tax on liquor will go up, gold and silver prices will go up and service tax for depositors will go down. There will also be a hike in movie ticket charges as entertainment tax that existed in the pre-GST times is coming back again. The one-time tax on new private vehicles will be more as will the one-time building tax and luxury tax on finished buildings.

Among the reductions are also the stamp duty on title deeds and release deeds. There will be no more court fee needed for applications to Revenue Department. The details are below.

Flood cess

States facing natural disasters can henceforth levy disaster cess with recommendation of GST Council. The GST Council had permitted the state to levy 1 % Cess on supply of good and services for rebuilding Kerala. Except for gold, it is not intended to levy cess on goods having GST rate of 5% or below.

0.25% flood cess will be levied on all goods coming under the fifth schedule including gold, silver and platinum ornaments on the value of supply. For supply of goods coming within the GST tax bracket of 12%, 18% and 28% and on all services, one percent flood cess will be imposed on the value of supply. This will be levied for a period of two years.

Drinking costs

The tax rate on the first sale of all kinds of foreign liquour including beer and wine will be increased by 2%.

Entertainment costs too

In pre-GST era, local bodies collected entertainment tax in State. When GST was implemented, it was instructed that local bodies need not collect this tax. But in states like Tamil Nadu, both taxes were collected. As per the recommendation of GST Council, the GST rate of cinema tickets was brought down to 18% from 28%. As such, the local bodies will be permitted to levy 10% entertainment tax on cinema tickets.

Goods and Services Tax

As per the decision of the GST Council, the following three changes would be made effective from April 1 onwards:

-          The threshold limit of registration for suppliers in goods will be raised from Rs 20 lakh to Rs 40 lakh

-          In the case of supply of goods, threshold for composition, will be increased to Rs 1.50 Crore and it will be subject to levy of compounded tax at 1 % only.

-          Generally, service providers were not allowed compounding facility. It was generally felt that 18 % service tax was excessive. Henceforth, service providers having turnover between Rs 20 lakh and Rs 50 lakh can pay compounded tax at 6 %.

Vehicle tax and stamp duties

The onetime tax on new motorcycles, motor cars and private service vehicles used for private purpose will be increased by 1%.

The additional fee levied by Central Government for the delay in producing fitness of transport vehicles and renewal of registration of non-transport vehicle will be done away with and in lieu of this, new fees will be levied as per Motor Vehicle Rules.

There is no provision in the Kerala Stamp Act to charge stamp duty for electronic records and electronic agreements. Hence, necessary amendments shall be brought in to levy stamp duty for the same.

Stamp duty for agreements relating to deposit of title deeds will be reduced from 0.5 to 0.1 per cent with a maximum ceiling of Rs 10000. Stamp duty for release deeds for such mortgages shall be reduced to 0.1 per cent with an upper limit of Rs 1000.

Stamp duty for agreements for the purpose of land development between the landlord and builder will be reduced to 1 percent from 8 per cent, with an upper limit of Rs 1000.

Land and luxury

In order to reduce price variation between the market value and fair value of the land in Kerala, the existing fair value will be increased by 10 percent. 

The luxury tax rate for residential buildings will be revised. The following luxury tax will be levied on the basis of the plinth area.

1.       3000 to 5000 sq. ft. – Rs 4000

2.       5001 to 7500 sq. ft. – Rs 6000

3.       7501 to 10000 sq. ft. – Rs 8000

4.       Above 10000 sq. ft. – Rs 10000

One time building tax and luxury tax will be levied on finished buildings, based on the plinth area recorded in the completion / plan certificate submitted with the Local Self Government.

The requirement of affixing five-rupee court fee stamp on applications and petitions before revenue department is dispensed with.

The fee for various services under Revenue Department would be increased by 5%. The appeal/ revision fees for Revenue Department will be increased from Rs 10 to Rs 20.

All charges and fees for services provided by various departments will be increased by 5%.

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