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Evading Taxmen, TN Chicks Come Home to Roost in Luxury Cars

Published: 21st August 2014 06:00 AM  |   Last Updated: 21st August 2014 03:08 AM   |  A+A-

PALAKKAD: Is the smuggling of chicks more lucrative than transporting live adult chickens? The recent seizures of chicks, brought into the state from Tamil Nadu using luxury cars and SUVs, by the intelligence wing of the Commercial Taxes Department have exposed the modus operandi of smugglers.

According to officials, Scorpios, Innovas and Xylos are being extensively used by chick smugglers, who have knowledge of the border terrain and nondescript roads. “In the last two months, we made six seizures of chicks from luxury cars arriving through bylanes. The chicks are transported in trays. One tray accommodates 80 to 100 chicks,” said Commercial taxes (Intelligence) officer K Karunadas. His team recently chased a car for 8 km to seize 5,000 chicks. An action that netted `1,36,790 as fine to the exchequer.

The Commercial Taxes Department imposes a 72.5 per cent tax in place of the normal 14.5 per cent, once a seizure is effected. The farmers who take chicks as part of integration farming can do it only for five times a year.

Under integration farming, poultry firms in Tamil Nadu provide one-day old chicks and feed to farmers in Kerala and buy it back after 40 to 45 days, Karunadas said.

The state loses in two ways when chicks are smuggled in. While the exchequer loses the 14.5 per cent tax on entering, their sale as adult chicken after the 45-day period goes undocumented. Only farms which have a turnover of above `10 lakh annually are liable to be taxed. When the sales go unaccounted, the farms could keep the turnover low and avoid taxation.  The spurt in arrival of chicks across the checkposts into Kerala is substantiated by dip in tax revenues at the Nadupunni checkpost in Palakkad.

The tax revenues at the Nadupunni checkpost through which 75 to 80 per cent of the chicken comes into the state have shown a declining trend. This is despite the fact that the floor price of chicken on which 14.5 pc tax is levied was raised from `70 to `95 and that of chicks from `25 to `35 in August 2013.

While the tax collection at Nadupunni from April 1 to July 31, 2013, was `3,835.9 lakh from 9,620 vehicles, the figures for corresponding months in 2014 stood at ` 3,677.048 lakh from 7303 vehicles, said A A Abdullah, Deputy Commissioner, Commercial Taxes. As the floor price of chicken was raised in August 2013, the tax collection should have showed an increase in 2014, but the figures speak otherwise. The tax netted at the Nadupunni checkpost in July 2014 was `729.03 lakh. The tax collection in July 2013 was `957.82 lakh, indicating a decline in the arrival of vehicles.

There are three types of poultry farming practiced in Kerala. The first belongs to the category of the traders purchasing live adult chicken from Tamil Nadu and bringing it to Kerala via the checkpost. The second, referred to as “integration farming”, relates to large corporate poultry farms in Tamil Nadu which supply one-day old chicks and buy them back from the farmers after 40-45 days for supply to retail outlets. Domestic farmers who purchase chicks, grow them and sell them in the retail market come under the third category, said G Mohandas, an award-winning poultry farmer from Elapully.

Officials said there is large scale tax evasion in the case of farms undertaking integration farming. If a poultry firm in Tamil Nadu supplies around 5,000 chicks to a farmer, he/she in turn undervalues the quantity as 1,000. Most of such farms close down the business once illegalities are detected, said Sales Tax officials.

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