Liquor now biggest source to Kerala tax kitty

Kerala registered a 14.1 per cent increase in commercial tax collection for the year 2009-10 with total receipts rising to Rs 13,194 crore as against Rs 11,564 crore in 2008-09. The collection is 4 per cent above the government's target of Rs 12,733 crore for the FY 09-10 period. This year the department aims to net Rs 15,125 crore.

Indian-made foreign liquor (IMFL) topped the list of major contributors to the tax kitty with Rs 3,164 crore, an increase of 26 per cent over the previous year. Taxes from the sale of petroleum products increased 8 per cent at Rs 2,896 crore. Petroleum products, which were the top contributor till 2008-09, slid to the second position for the first time.

The hike in the prices of IMFL was the main reason behind this shift. During 2008-09, tax collection from petroleum products was Rs 2,670 crore and that from IMFL Rs 2,503 crore. IMFL and beverages attract 60-90 per cent tax in Kerala, but that of petroleum products has 24-41 per cent tax. There has been a huge increase in the sale of IMFL in Kerala over the last 4-5 years and the state has the largest consumption in India.

The sale of gold contributed a tax revenue of Rs 170 crore, up Rs 27 crore, while under the head of luxury taxes, the state collected Rs 100 crore in 2009-10. Cement contributed Rs 502 crore and bar and hotels Rs 192 crore.

The average monthly collection in the year crossed the Rs 1,000 crore mark, except in April and July, according to data. The receipts through value-added tax (VAT) was Rs 6,945 crore and through Kerala General Sales Tax (KGST), the state collected Rs 6,248 crore.

The setback on the sales front because of the general economic slowdown and the exodus from the Gulf region are cited as the major reason for the slower growth rate in the said year.