STOCK MARKET BSE NSE

Huge tax evasion in gold sales, says Kerala finance minister Thomas Isaac

FM says govt getting less than Rs 200 cr as tax, hopes e-way bills will plug loophole that allows jewellers to dodge GST

Published: 02nd August 2019 02:12 AM  |   Last Updated: 02nd August 2019 02:12 AM   |  A+A-

Express News Service

KOCHI: The state government fears a huge evasion of tax is taking place from the sales of gold in Kerala, the country’s biggest consumer of the yellow metal, following a sharp decline in tax collection in the Goods and Services Tax (GST) regime. Finance Minister T M Thomas Isaac said the state government is getting only less than Rs 200 crore as tax from the gold sales compared to more than Rs 750 crore it fetched under the erstwhile Value-Added Tax (VAT) regime. He blamed the lack of preparedness and absence of invoices matching the sales for the “huge leakages” in GST revenue. 

Talking to Express, Isaac said despite the lower rate of 1.25 per cent under VAT, the state government collected about Rs 630 crore in 2016-17, while under GST from 2017-18 where the rate is 3 per cent, the amount mobilised has been falling well short of Rs 200 crore. “We are not able to pinpoint the loophole,” he said, adding that businesses could be showing the sales outside the state to dodge the tax payment. “Jewellers are suppressing the sales,” the Finance Minister said. 

He said introduction of the e-way bill -- an electronic way bill for movement of goods from one place to another -- can help plug the loophole. As per the National Sample Survey Office (NSSO) data, the state’s per capita expenditure on gold ornaments is Rs 208.55 per month in rural and Rs 189.95 per month in urban areas. 

This is far ahead compared to the second top gold buyer, Goa (Rs 34.07 per month per person in rural) and Tamil Nadu (Rs 44.86 per month per person in urban). A report published by the World Gold Council on Thursday said the demand for gold jewellery in India increased by 18.7 tonnes (12 per cent) to 168.6 tonnes, compared with 149.9 tonnes in Q2 2018, the best quarter growth since Q2 2017, and Kerala figured among the top buyers. 

Isaac said the government has constituted a team to detect the tax evaders and plug the loophole. “The team has commenced its work, and I’ll be able to find the cause of the tax evasion in the next few weeks,” he said. Mary George, former chairperson of Kerala Public Expenditure Review Committee, reckoned that Kerala should get at least Rs 18,000 crore per annum if the tax evasion is stopped. 

“It’s no secret that the jewellers maintain two books to maintain the bills. We are not even getting 20 per cent of the sales of gold in Kerala,” she said, adding that there are cases where the payments for the gold jewellery purchases are made outside the country.

More from Kerala.

Comments

Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the newindianexpress.com editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on newindianexpress.com are those of the comment writers alone. They do not represent the views or opinions of newindianexpress.com or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. newindianexpress.com reserves the right to take any or all comments down at any time.

IPL_2020
flipboard facebook twitter whatsapp