The Kerala government has decided to accept demonetized Rs 500 and Rs 1,000 notes for payment of various taxes, Finance Minister Thomas Isaac said today.The demonetized currency notes would be accepted for paying tax arrears too, the minister said, adding that the decision was taken after discussion with Union Finance Minister Arun Jaitley during today's GST Council meet."Various state taxes including vehicle tax, registration tax, electricity bills, water tax can be paid using the old currency notes till November 24 and the order regarding this will be issued tomorrow," Isaac said.The minister also said the people can use the demonetized notes to recharge season tickets of Kerala State Road Transport Corporation. The state government has also demanded the Centre allot a grant or a loan to compensate the losses suffered by the state due to demonetization.

"The Union Finance Minister has agreed to consider our demand. We had set aside enough to pay the next month's salary but if the Centre does not cooperate, then it will affect the Christmas celebrations," Isaac said.The state government has also decided to appoint a panel to study long-term and short-term impacts of the demonetization move in the state. "The Centre's decision to withdraw the banknotes have seriously affected the income of the state. VAT collection and vehicle registration have been badly hit," he added.