The Congress-led United Democratic Front (UDF) Opposition on Wednesday blamed Finance Minister T.M. Thomas Isaac for an estimated ₹2,700-crore shortfall in GST (Goods and Services Tax) revenue from the gold business.
UDF legislators, led by Leader of the Opposition Ramesh Chennithala, staged a walkout of the Assembly after accusing Dr. Isaac of having allowed big-time tax dodgers in the jewellery trade go scot-free even as State revenue collection dipped. Congress legislator V.D. Satheeshan sought leave of the House to discuss the ‘dubious hesitance’ on the part of State GST enforcers to collect tax from gold sellers. By a conservative estimate, the gold business in Kerala owes the treasury at least ₹3,000 crore annually. But the ‘tax defaulters’ have contributed less than ₹300 crore.
He said the government remained a mute witness as the tax evaders robbed the State of its due.
It rarely conducted searches, seized contraband gold or audited gold sales. The exponential increase in bullion price has not reflected in tax collection despite Kerala having the highest per capita spending on gold.
Isaac’s assurance
Dr. Isaac said he planned to place tax enforcers in jewellery shops to monitor sales to make a sample tax assessment. Tax enforcers have inspected 75 jewellery shops and are trying to make sense of their production and sales records, most of it hidden in cloud accounts, he said.
Many jewellers fraudulently claim input credit to evade GST. Kerala wants e-invoicing and e-way bills, not delivery challans, for gold transactions.
It has pressed its case in the GST Council, Dr. Isaac said.