Insights on the Kerala Finance Bill, 2024

Posted On - 7 May, 2024 • By - Agnel Leona

Introduction:

This Bill[1] was introduced to give effect to certain financial proposals of the Government of Kerala for the financial year 2024-2025 and the same is enacted on Seventy-fifth Year of the Republic of India i.e., 26.01.2024 as Kerala Finance Act, 2024.

The Government herein has proposed certain amendments to the Kerala Court Fees and Suits Valuation Act, 1959 with respect to change in court fees in certain categories of cases filed under the provisions of the Family Courts Act, 1985 and the Negotiable Instruments Act, 1881.

The tax proposals in the Kerala Finance Bill, 2024 will have effect from 01.04.2024 in accordance with the provisions under the Kerala Provisional Collection of Revenues Act, 1985. A declaration to that effect is also made in the Kerala Finance Bill, 2024.

Since the introduction of GST, from 1st July 2017 a large amount of tax, levies and penalties were unable to be paid by dealers under the previous financial enactments. Therefore, Amnesty schemes were introduced in previous financial years, to resolve these arrears, but still significant amounts were pending. Hence, to resolve the hassle of the stakeholders with outstanding payments, the government for this purpose has decided to include a comprehensive amnesty scheme in the Kerala Finance Bill, 2024.

Delegated Legislation: [Clause 7]

The Commissioner of State Tax determines the designated authority for carrying out the scheme/bill’s objective by appointing one or more officers, or a committee of officers. Clause 9, 14, 16, 21, 25 and 26 of the Bill states the Powers of the commissioner of tax.

Objectives:

The Bill mainly focuses on the following acts and seeks to amend the same to effect to financial proposals of the Government of Kerala for the financial year 2024-25 as announced in part IV of the Budget Speech 2024-2025, namely:

  1. The Kerala Stamp Act, 1959 (17 of 1959);
  2. The Kerala Court Fees and Suits Valuation Act, 1959 (10 of 1960);
  3. The Kerala Electricity Duty Act, 1963 (23 of 1963);
  4. The Kerala Motor Vehicles Taxation Act, 1976 (19 of 1976).
  • Changes To Kerala Stamp Act 1959:
  1. Section 28A: – (1B) has been added to the provision which makes an increase of a fixed percentage in the fair value of land. The increased value shall be deemed to be fair value of the land.

For the purpose of this section, “the value of the property” means for land where the fair value has been fixed under section 28A, such fair value, and for leases where no fair value has taken fixed for the land or for leases of Government land, the market value declared in the lease deed shall be treated as the value of the property.

Any consideration in the form of premium or money advanced or to be advanced by whatever name called shall be added to the fair value for the assessment of stamp duty.

  1. Schedule 33: – Lease – including an underlease or sub-lease and any agreement to let or sub-let where such lease purports to be;
  1. Less than 1 Year – Rs.500
  2. 1 Year – 5 Years – 10% of the value of the property subject to a minimum of Rupees 500.
  3. 5 Years To 10 Years- 20% of the value of the property subject to a minimum of Rupees 1000.
  4. 10 Years To 20 Years- 50% of the value of the property subject to a minimum of Rupees 2000.
  5. 20 Years To 30 Years – 75% of the value of the property.
  6. Above 30 Years – 90% of the value of the property.

If a lease relates to only one item of property and that property is a building, or if an instrument relates to more than one item of property and one or more such item is or are building or buildings, the whole rental amount payable or deliverable under such lease, and/or any consideration in the form of premium or money advanced or to be advanced, or the proportionate fair value of the land in which the building is situated, whichever is higher, shall deemed to be the value of the property.

Article 20 and Article 21 are the two new additions to the previously existing 19 articles in Schedule II of the Kerala Court Fees and Suits Valuation Act, 1959.

  • Article 20 (a)  states the court fee to be paid based on the subject matter in dispute which changes according to the value of the subject under section 7 of Family Courts Act, 1984;
  • Article 20 (b) states the court fee to be paid in memorandum of appeal filed before high court under Section 19 of the Family Courts Act for the counterclaim or petition filed under clause (a);
  • Article 21 (a) states the court fee to be paid in the application or petition of complaint or charge of offence filed under section 138 (a) of the Negotiable Instruments Act, (b) Memorandum of Appeal, (c) Revision Petition.

The new addition to the schedule states a fixed court fee to be paid that addresses petitions and counter claims in family courts and section 138 of the Negotiable Instruments Act. Hence, the Courts concerned shall collect the revised court fees in such category of cases, as are applicable, in accordance with the amendments proposed to the Kerala Court Fees and Suits Valuation Act, 1959 in the Kerala Finance Bill, 2024 with effect from 01.04.2024.

The is not much change being made in the Kerala Electricity Duty Act, 1963, except for the rates of duty which have been substituted from “6 Naya Paise” to “10 paisa”.

  • Changes To Kerala Motor Vehicles Taxation Act, 1976:

Amendment of Act 19 of 1976 – This amendment states that if any vehicle mentioned under Section 88(9) of the Motor Vehicles Act, 1988 which is registered in any other state other than Kerala, it has to pay tax for such vehicle based upon the days stayed at Kerala. 

[1] THE KERALA FINANCE BILL, 2024