The alleged laxity of the Centre in activating the e-way billing system and delay in transferring funds are understood to have battered the State’s finances and rattled the functioning of the treasury.
The financial crisis, though transient, is likely to prevail till January and has forced the State government to impose curbs on treasury payments. The compensation for moving over to the Goods and Services Tax (GST) regime is expected to be made in December, but the State would be getting it only by January.
Balance upset
Deviating from the convention of transferring funds in the beginning of every month, the Centre has now pushed it to the middle of every month and that has also upset the fiscal management of the government. The State would not be able to avail itself of a loan immediately and the crisis is feared to continue till December end.
The inordinate delay in putting in place the e-way billing system has compounded the woes of the government as it has virtually opened a green channel for the wilful to smuggle in goods evading tax and resulting in huge revenue loss to the State exchequer. The recent rate restructuring by the GST Council has also taken a toll on the State’s income.
All the 74 check-posts in the State have become defunct and the 84 squads that were deployed for cracking down on tax evaders have turned dormant on adopting the new tax regime.
Fake GST number
Traders and consumers are reported to be carting in substantial volumes of goods to the State from various destinations without any curbs and instances of using bills with fake GST number are also said to be thriving for want of monitoring. The decision to scrap check-posts and neutralise squads without much forethought of its impact is being cited as one of the reasons for the revenue loss.
Anticipating such issues, the State had made a fervent demand at the GST Council for continuing the system of presenting a delivery note that was in vogue before adopting the new tax regime. The council permitted to continue it, but did not issue an order. When a complaint came up before a court, it demanded to furnish the order and in the absence of the order, now the State government is unable to activate the squads or crack down on violators.
Finance Minister T.M. Thomas Isaac told The Hindu that the crisis was nothing but a creation of the Centre. It was an offshoot of the delay in having the e-way billing system.
The government could not reactivate the squads or revive the enforcement pre-GST order. All States were facing a similar crisis and it was for the Centre to act, he said.