THIRUVANANTHAPURAM: A special drive by taxmen focussing on the gold market saw the confiscation of 351 kg of gold in the previous fiscal. This is a 300 per cent increase from the previous year. The drive which started last September is going on. A total of 306 cases were booked in 2021-22 and the amount collected, including tax and penalty, was Rs 14.62 crore. In 2020-21, 87.37 kg of gold was seized as part of 133 cases and the revenue was Rs 8.98 crore.
The drive is in the wake of large-scale tax evasion in the sector, especially since July 2017 when gold was brought under GST regime. The state government’s revenue from gold sales in the last year of VAT regime was nearly Rs 630 crore which nosedived to Rs 200- 300 crore range in later years.
People opt for evasion not just to save the 3 per cent GST, say sources in the state GST department. There are traders who do it to avoid paying higher income tax or to sell smuggled gold which cannot be accounted for anywhere. The department has strengthened intelligence and surveillance networks to prevent evasion. Bus stands, railway stations, outlets and hallmarking centres are monitored to detect illegal handling of the metal.
The state GST Department started confiscation of smuggled gold in August last year. It was based on an order by the Gujarat High Court that allowed the taxes department there to confiscate the contraband invoking Section 130 of the GST Act. Till then, the state invoked Section 129 in which the offender was let off after levying three per cent GST and an equal amount as fine.
Under Section 130, the offender has to pay the market price of the gold. Majority of the cases booked by the department are under Section 129 and Section 130 is invoked in serious cases in which the offender does not have any document for the possession of the consignment. Kerala’s earlier demand at the GST Council to bring gold under the ambit of e-way bill was opposed by several states citing security reasons. Leaking of information may cost the life of the carrier, they claimed. Another proposal of the state government to implement e-way bill for intra-state transportation is pending before the council.
Large-scale tax evasion
■ The drive is in the wake of large-scale tax evasion in the sector, especially since July 2017
■ The amount collected, including tax and penalty, was Rs 14.62 crore in 2021-22