Kerala Budget Speech 2026-27

Minister for Finance , Mr. K.N. Balagopal presented Kerala State’s budget on 29.01.26.

Key points on Taxation aspect –

• Government intends to honour the taxpayers with awards. An amount of Rs. 5 crore is earmarked for this. Taxes Department will prepare detailed guidelines in this regard.
• Better tax administration is not the only pre-requisite for augmenting GST revenue. In order to augment IGST revenue, the administrative and technical short-comings that still exist should be addressed.
• Additionally, tax administration of the Centre and the other States should be revamped.
• The proportional share from the central tax revenue (divisible pool) to the states is being curtailed.
• The recent milestone reforms in the State GST Department have contributed considerably in making tax related services more efficient and increasing tax revenue to the State exchequer. By massive data interpretation, increased tax revenue, the department is able to achieve effective tax administration, evidence-based policy decision and increasing the operational efficiency. An amount of ₹26.15 crore is allocated for the activities of the GST Department.
• Ernakulam district stands as the State’s highest contributor to tax revenue and a key driver of economic activity. In order to strengthen financial governance, the Government proposes to establish a Finance Tower at Kochi, bringing together major finance and taxation wings, including GST, under one integrated facility. The project will be implemented by developing modern infrastructure that meets longterm requirements, so as to enable finance and taxation departments, including GST, to function within a single integrated system.
• With the transition to the GST regime, tax enforcement has evolved into a sophisticated, technology-driven process anchored in data analytics and intelligence. The Government proposes to repurpose and strengthen existing check-post infrastructure for advanced surveillance and real-time data integration. This initiative will ensure the prudent utilisation of existing public assets while facilitating an evidence-based assessment of inter-State trade flows to safeguard State revenue.
• Post Graduate Diploma in GST: It is announced that post graduate diploma in GST course, conducted through Gulati Institute, is a government approved one.
• Flood Cess Amnesty Scheme: In 2019, a one per cent flood cess was imposed on GST-applicable supplies to raise additional resources required by the state due to natural disasters.
• In order to clear the dues of the above said flood cess for the period upto July 2021, an amnesty scheme was announced in the 2025 budget for a short period of 3 months from 1st April 2025 to 30th June Now, considering the request of the trade community, so as to provide a relief to them, ‘Flood Cess Amnesty 2026“ is declared in continuation of the flood cess amnesty scheme declared in 2025.