THIRUVANANTHAPURAM: Finance Minister T M Thomas Isaac said the collection of presumptive tax by some hoteliers in the name of GST was illegal and action would be initiated against them. Isaac told reporters here on Saturday he had noticed some hoteliers, who have less than Rs 75 lakh turnover, were collecting five per cent tax citing the GST regime. He pointed out that in Kerala, the imposition of 18 per cent tax on air-conditioned restaurants and hotels had caused a huge price rise.
“The situation in Kerala is serious. We’ll take up the matter at the next GST Council meeting on September 9 and demand to reduce the tax on hotel food to two per cent instead of the current five,” said Isaac.
Referring to the Kerala Infrastructure Investment Fund Board (KIIFB), the minister said it was not depending on bonds alone to find money for its infrastructure projects. “Institutions like Kerala State Financial Enterprise conducting NRI Chits in association with KIIFB would be helpful for mobilisation of infrastructure funds. Borrowing from the capital market requires elaborate preparation. But in the changed circumstance, banks aren’t the only source for availing loan,” he said.
Isaac said Kerala could not opt for Tamil Nadu’s revenue model of collecting toll on highways. “At the most, we could levy toll on the national highways. Our other roads are open-ended and it would be impractical to levy toll on them to fund the road products,” he said. Isaac also said capital bonds in the country were yet to blossom. However, with the support of the SEBI and other credit-rating agencies, KIIFB could attract investments. He hoped the huge investment in the infrastructure sector would transform Kerala in the next few years.
Asked whether there was any mismatch between his party’s ideology and government ‘s policies, Isaac said, “We can’t continue the situation of taking 15 hours to pass 550 km on our national highways. We’ve a manifesto and our approach on infrastructure development is clear.”