• Located at the southwestern tip of India, Kerala is a major tourist destination in South Asia.india map image by Vladislav Gajic from Fotolia.com
  
  The Kerala General Sales Tax Act established in 1963, regulates state tax levied on the sale and purchase of goods in Kerala, India. Taxable goods include movable property, live stock, crops and certain land transactions. Tax exempt goods are electricity, newspapers, stocks, shares and securities and actionable claims.
  
  

Governing Authority

• The levy and collection of sales tax in Kerala is governed by the Kerala Board of Revenue.
  
  

Levy of Sales Tax

• Every resident dealer of Kerala who is not a representative of the state government who earns more than two lakh rupees from the sale of movable property over the course of a year is required to pay sales tax at the specified rate for those goods.
  
  

Industrial Unit Registration Fees

• Dealers who want to establish industrial units must pay to register them. Registration fees never exceed INR20,000 under the act. Dealers whose total yearly revenue is less than three lakh rupees, must pay an INR500 registration fee. Dealers whose total turnover is between three and 10 lakh rupees must pay an INR750 registration fee. Where revenue is between 10 and 50 lakh rupees, the fee can range from INR 25 to INR1,750 for each lakh. If earnings are expected to be over 50 lakh, the registration fee can be between INR50 and INR2,000 for each lakh.
  
  

Foreign Liquor Sales Tax

• Kerala defines foreign liquor as wine, champagne and distilled spirits such as rum, brandy, cocoa brandy, whiskey, gin, beer and cider. Hotel, restaurant and club bars that sell foreign liquor are required to pay a 10 percent sales tax and all other dealers must pay 5 percent.
  
  

Account Maintenance

• Dealers registered under the act are required to maintain accurate account balances of sold goods. Accounts may be kept in any of the following languages: English, Gujarati, Tamil, Malayalam or Kannada. Purchase and issue bills must be kept to satisfy sales tax audits. Audits are mandatory for dealers who earn more than 40 lakh rupees in a year.
  
  

Transfer of Goods

• Any out-of-state dealer, who must pass through Kerala to transfer goods valued at more than INR2,500 to another state, must secure a transit pass en route. The transit pass precludes the dealer from having to pay sales tax within Kerala as it proves that these goods are not for sale within Kerala. Not securing a transmit pass allows Board of Revenue representatives to assume goods are being smuggled. In the event goods are deemed to be smuggled, a written notice of seizure is then issued to the dealer.