Kerala’s goods and services tax (GST) revenue during October this year was at its peak of Rs 18.56 billion against Rs 11.7 billion during September because of various reasons, including the state’s efforts to stop revenue evasion on e-way bills.
The state, which expects around 20 per cent growth in tax revenue per month once GST is fully implemented, has so far only seen 8.75 per cent growth this year.
“We hope that proper implementation of the system could bring in full benefits of the new tax regime,” said the state’s finance minister Thomas Isaac.
Commenting on the growth of GST revenue during October, he clarified that it was high compared to September, also because of the impact of the devastating floods, which hit the state in August.
However, GST revenue in October was the highest the state has received after the tax regime was implemented, and is almost 18.75 per cent higher than the GST revenue of Rs 15.63 billion registered during October last year, Isaac said in his social media post.
“The growth in October gives us hope that our tax revenue will significantly improve when GST is completely implemented,” he said in his post.
He elaborated that the state GST component is about Rs 6-7 billion while the second component of IGST — for goods brought in from other states to Kerala – is witnessing a major evasion.
Almost 70 per cent of the state’s consumption is goods from other states and the tax revenue from this has to be at least double of what the state GST is. However, IGST is currently around Rs 7-9 billion and is falling short by around Rs 5-7 billion owing to the leakage.
While e-way bills have been implemented four months back to curb evasion of tax in inter-state sales, there is no mechanism at present to monitor e-way bill on the goods moved from one state to another. Such a mechanism is not expected to be implemented in the near future. Since there are no check posts, the state also cannot stop all vehicles to check whether transporters have e-way bills.
From August, the state government assigned around 400 officials in different squads along major roads in the border to check e-way bills randomly in around five per cent of the vehicles.
Measures taken to implement one per cent tax at source in the e-marketing sector also has helped block tax evasion.
However, he added that whether the growth in tax revenue during October is a one-time phenomenon or a permanent one would be known only in next two to three months.