10% surcharge applicable on big chain store in kerala

Your understanding is correct

Amendment of Act 11 of 1957.—In the Kerala Surcharge on Taxes Act,
1957 (11 of 1957), in section 3,—
(a) after sub-section (1), the following sub-section shall be inserted,
namely:—
“(1A) The tax payble under sub-sections (1) and (2) of section 6 of the
Kerala Value Added Tax Act, 2003 (30 of 2004), other than declared goods as
defined in section 14 of the Central Sales Tax Act, 1956 (Central Act 74 of 1956)
shall, in the case of national or multi-national companies functioning in the State
as retail chains or direct marketing chains who import not less than fifty per cent
of their stock from outside the State or country and not less than seventy-five. per cent of whose sales are retail business, and whose total turnover exceeds five
crore rupees per annum, but e x c l u d i n g such class of dealers of
certain commodities, which may be notified by the Government from time to
time, be increased by a surcharge at the rate of ten per cent, and the
provisions of the Kerala Value Added Tax Act, 2003 (30 of 2004) shall apply in
relation to the said surcharge as they apply in relation to the tax payable under
the said Act.
Explanation I:— For the purpose of this section big retail chains and direct
marketing chains mean retail sales outlets or part of retail sales outlets of
companies which share a registered business name or commercial name by way
of franchisee agreements or otherwise with standardized sales, purchase and
promotional activities

So why is there a discrimination for only national or multi-national companies as retail chains and not for normal retail chains. Has it ever been challenged ?