Thiruvananthapuram: Instead of burdening the public with new impositions, the financially ravaged state has placed its bets on efficiency and decided to set in motion an intensive drive to mop up at least a percentage of the over Rs 32,000 crore it had failed to collect from individuals, companies and public sector undertakings over the years.
Of this only Rs 9500 crore is caught in various disputes. This means, that over Rs 22,500 crore, which constitutes 35 percent of the state’s revenue, can be easily recouped. Such a massive short levy of revenue, which reflects both inefficiency and corruption, is revealed in the finance accounts furnished by the Comptroller and Auditor General to the Finance Department. The Public Expenditure Review Committee has also reportedly pushed the finance department for the ‘arrears recoup’ drive.
Besides, here are two other steps that will be immediately pursued to bail the state out of the fiscal crisis: registration of new dealers and better coordination between the Commercial Sales Tax (CST) department and others.
As of now, there are nearly 1.80 lakh registered dealers in the state. However, the data collected by the Department of Economics and Statistics shows that there are 13.24 lakh units in the non-agricultural field existing outside the scope of VAT.
The highest is in the manufacturing sector, nearly 4.9 lakh. Retail traders outside the tax radar total 6.18 lakh. Restaurants and hotels unnoticed by the tax system are 97,826. Even vehicle workshops not paying tax number a whopping 37,510 units.
“It has to be admitted that coordination between the Commercial Taxes Department (CTD) and other government departments is virtually nil and this has inevitably resulted in revenue leakages,” a top CST source said. Take for instance, the short levy of nearly Rs 140 crore from the import of raw cashew nut from 23 dealers detected recently.
The 23 dealers had imported the raw cashew valued at Rs 2104 crore during the period from 2008-09 to 2010-11. However, the purchase turnover disclosed by the assessees in their VAT returns filed with the CTD was only Rs 1079 crore. Since the CTD did not cross-check with the Customs Department, the state lost nearly Rs 140 crore by way of short levy.
