THIRUVANANTHAPURAM: What went wrong in state’s projections of an increase in revenue after the GST? According to the Finance Department, the reasons are: Delay in the implementation of e-way bill system, rate cuts and glitches in the e-filing system.Finance Minister Thomas Isaac said at present the states did not have any mechanism in place to check inter-state movement of goods. E-way bill is the electronic permit for transporting goods worth `50,000 or above within a state or between states.
“E-way bill generation will be possible on GSTN only in February this year. Until then, state’s tax officers can’t crosscheck the invoices. Since Kerala is a consumer state and 80 per cent of goods are brought in from other states, tax evasion could seriously affect the revenue,” said Isaac. Reduction in tax rate in the GST is another issue. Several goods, which had a combined tax incidence of 30-35 pc in the VAT regime, now have only 12-18 pc tax.
REDUCTION in tax rate in the GST regime is another issue raised by the state. Several goods, which had a combined tax incidence of 30-35 per cent in the VAT regime, now have only 12-18 pc tax. Rate cut on 178 items ahead of the Gujarat polls further worsened the problem.Isaac said the rate cut did not reflect in prices and, hence, its sole beneficiaries were the corporates. “There’s no mechanism in place to ensure the manufacturers reduced prices in proportion to the tax cut.
Now, the people and government stand losers,” he said. Kerala had asked the Centre to rethink the tax cut on several goods, mostly FMCGs. Glitches in the web-based application for return filing is the third reason cited by the Finance Department for the decrease in revenue. Traders have raised complaints of the website going slow and their filing attempts failing halfway.
Isaac confirms slowdown in tax growth, post GST
T’Puram: In the first official confirmation of the GST’s apparent downside, Finance Minister T M Thomas Isaac told the Assembly the expected increase in tax revenue has not happened in the state under the newly introduced tax regime.