Finance Bill passed in Kerala Assembly amid Opposition boycott

Published 2 July 2026 · politics

The Kerala Finance (No. 3) Bill, which features the lowered sales tax on low-alcohol beverages in addition to tax revisions and amnesty schemes, was passed

The Kerala Finance (No. 3) Bill, which features the lowered sales tax on low-alcohol beverages in addition to tax revisions and amnesty schemes, was passed in the Kerala Assembly on Wednesday — the final day of the Budget session — amid a boycott by the Opposition Left Democratic Front (LDF). The Bill says the tax revision pertaining to low-alcohol beverages will take effect only after a notification by the government in the official gazette. In line with the announcement in the Revised Budget for 2026-027, the rates for low-alcohol beverages have been revised to 120% and 175% respectively for beverages with alcohol strength ranging from 0.5% volume by volume (v/v) to 10% v/v, and those with strength above 10% v/v and up to 20% v/v. The LDF objected to the Bill on the grounds that the United Democratic Front (UDF) government was passing it without referring it to the House’s Subject Committee.

Leader of the Opposition Pinarayi Vijayan, announcing the boycott, alleged that the tax cut was designed to allow liquor majors to flood Kerala with their products. The UDF government was slashing the tax by more than 130% and the LDF disagreed with it, Mr. Vijayan said. The Chief Minister swept aside the Opposition charge, stating that all procedures were adhered to in introducing the Bill. The revised tax on low-alcohol beverages was announced in the Revised Budget presented on June 19. The Finance Bill was introduced in the Assembly as per a decision taken at the Assembly’s Business Advisory Committee meeting on June 24. The previous LDF government too had passed its Finance Bill in the Assembly in February this year without referring it to the Subject Committee, Mr. Satheesan said. The Finance Bill also included the following tax revisions, the Small Arrear Waiver Scheme, 2026, and the Flood Cess Arrear Settlement Scheme, 2026.

The road tax on electric vehicles (EV) priced up to ₹10 lakh stands slashed from 5% to 3%. The road tax on EVs in the ₹15 lakh-₹20 lakh price range is down from 8% to 5%. On the other hand, the road tax on EVs priced above ₹40 lakh is up from 10% to 15%. Road tax for other price categories remains unchanged. Quarterly taxes on India tourist permit (AITP) buses have been slashed to encourage more all-India tourist permit buses to register in Kerala. The quarterly tax rate of ₹2,000 per seat has been slashed to ₹900 while the per-sleeper rate stands slashed from ₹3,000 to ₹ 1,500. In the case of trailer vehicles, the tax slabs have been unified and revised. The additional tax slab imposed on trailer vehicles weighing more than 20 tonnes has been removed. Under the Flood Cess Arrears Settlement Scheme, 2026, taxpayers can settle arrears on the 1% flood cess levied on Goods and Services Tax (GST) applicable on Business-to-Customer (B2C) supplies.