State commercial taxes revenue shows healthy curve
THIRUVANANTHAPURAM: Making light of the predictions of demonetisation drive affecting it, the state’s commercial taxes revenue might show a healthy trend in the final tally.
‘De-mon’ fails to haunt state’s commercial taxes revenue
Several experts, including Finance Minister Thomas Isaac, had predicted a steep fall in the state’s commercial taxes revenue in the post-demonetisation era. As the Commercial Taxes Department’s final tallying process nears its business end, it’s clear that the total collection will be almost same as in previous December - `2,500 crore.
Reason: Spurt in cashless payment systems that give less leeway for tax evasion. The department collects taxes for a given month between 10th and 25th in the succeeding month.
Between December 1-28 this year, CT revenue is `2,395 crore of which Value Added Tax (VAT) collection is `1187.73 crore and Kerala General Sales Tax (KGST) stands at `1,188 crore. The net collection was `2,324 crore in the same period last year. When the accounts are closed for the month, the figure could be around or more than `2,500 crore - previous December’s figure. However, the growth rate will drop to single digit - from November’s 14 per cent and October’s 17 per cent. Stakeholders attributed the “flat growth” to the switchover to cashless payment systems. “Sales and trade were affected. But that was compensated by the increase in cashless payments which give less scope for evasion,” a Finance Department official said. A N Sasidharan, state vice-president of Tax Consultants Association, said a sizeable chunk of business, especially of major tax payers, has shifted to cashless regime. He also cited another reason for the lack of drop in tax revenue. “Several traders submitted fake sales bills to convert their black money stock,” he said.
Cashless payment systems like credit/debit cards, e-wallets like Paytm, RTGS and NEFT are being widely used by traders of all strata. The SBI officials said it has installed 11,754 swiping machines in the state. They said 5,463 machines have been installed post demonetisation and 2,000 requests are being processed.
SBT officials said 1,000 of its nearly 4,000-POS were installed after the currency withdrawal. “Majority of the machines were inactive prior to November 8. But after November 8, business through POS has become brisk,” they said.