Kerala to go ahead with flood cess, rules out price rise
THIRUVANANTHAPURAM: Stating that the government is set to go ahead with its plans to collect one per cent flood cess from next week, Finance Minister Thomas Isaac on Friday said it would not lead to price rise of consumer products and trade diversions as expressed by a section of legislators.
After the Goods and Service Tax (GST) regime was introduced, in fact, the tax rate of many of the consumer products has come down within the bracket of three to 12 per cent. Hence, collecting one per cent extra cess would not lead to any kind of price rise, he stated in the assembly, while replying to a discussion on the finance bill.
V D Satheeshan of the Congress alleged that none of the traders had ever reduced the prices of essential commodities in proportion to tax cuts announced by various governments in the state.
Instead, they would never forget to hike the prices of commodities even if there was the slightest of hike in tax rates.
In this backdrop, imposing one per cent tax for the commodities would increase the burden on people who were yet to come out of the impact of the flood, he said.
Replying to his argument, Isaac said it was a misplaced fear which would lead to an unwarranted situation.
If everybody believed that it could lead to a price rise, the traders would certainly capitalise on the fear. First of all, there was no need for such fear.
Further, after the introduction of GST, the tax rate of many of the items including marble and granite had come down, so it could cushion the effect of this one per cent additional burden, he said.
Moreover, the state had no other ways to find funds required for its development work, the minister said.