Kerala Govt Slaps 'Flood Cess' in Budget; Movie Tickets, Beer and Wine to Get Costlier

Thiruvananthapuram: Movie tickets and beer and wine prices are to be hiked and a ‘flood cess’ slapped in cash-strapped Kerala as the CPI(M)-led LDF government presented its first post-flood budget Thursday in an effort to mobilise additional resources to rebuild the state.

As the southern state faced a severe financial crunch, Finance Minister T M Thomas Isaac presented the budget for the 2019-20 fiscal, giving thrust to a massive rebuilding exercise.

He proposed 25 new projects to resurrect Kerala after the devastation caused by the deadliest flood of the century last August.

“This is a budget for creating a new Kerala,” Isaac said stating that Rs 1,000 crore has been earmarked for the ‘Rebuild Kerala’ initiative in the plan.

Seeking to mobilise additional revenue, a 0.25 per cent “flood cess” would be levied on all goods coming under the Fifth schedule, including gold, silver and platinum ornaments on the value of supply, the minister said.

“For supply of goods coming within the GST, the tax bracket of 12 per cent, 18 per cent and 28 per cent and on all services, one per cent flood cess will be imposed on the value of supply.

This will be levied for a period of two years,” he said, adding Rs 600 crore additional revenue per year is expected through this measure.

The budget proposed to increase by two per cent, the tax rate on first sale of all kinds of foreign liquor, including beer and wine, which is expected to mobilise an additional revenue of Rs 180 crore.

Watching movies in theatres is also set to cost more as the budget proposed that local bodies permit levy of 10 per cent ‘entertainment tax’ on tickets.

“As per the recommendation of the GST Council, the GST rate of cinema tickets was brought down to 18 per cent from 28 per cent. As such, the local bodies will be permitted to levy 10 per cent entertainment tax on cinema tickets,” Issac said.

A total of Rs 200 crore additional revenue is expected by levying a one time tax of one per cent on new motorcycles, motor cars and private service vehicles used for private purpose.

The luxury tax rate for residential buildings are also proposed to be revised.

In order to address increasing atmospheric pollution due to diesel and petrol vehicles, the budget proposed to promote electric vehicles, providing 25 per cent tax concession for five years for such vehicles.

“A 50 per cent concession on tax for five years will be granted to newly registered e-Rickshaws,” the minister said.

As an alternative to the Centre’s much-hyped “Ayushman Bharat’ scheme, a comprehensive health insurance scheme, seeking to ensure health security to all families, was
proposed in the fourth budget of the Left goverment.

Fulfilling the long-pending demand of the expatriate community, the budget proposed that the Department of Non Resident Keralites Affairs (NORKA) would bear expenses to
transport bodies of deceased expatriates from the Gulf region to the state.

All welfare pensions have been hiked by Rs 100, giving solace to lakhs of beneficiaries.

Isaac said the total budget outlay has been pegged at Rs 1.42 lakh crore. Even during the financial crisis, the expected plan outlay for 2019-20 has been raised to Rs.39,807 crore from Rs.32,564 crore, he added.