Thiruvananthapuram: Finance minister Dr T.M. Thomas Isaac has concluded district-level meetings of tax officials here on Friday. The meetings were convened as part of preparing officials for the GST regime, and also to galvanise his team of tax sleuths to make the best of the ‘VAT amnesty scheme’ announced by the LDF government. Dr Isaac expects Rs 2,000-Rs 2,500 crore from the scheme.
The Finance Department had prepared a performance dossier of each sales tax circle before the series of meetings had begun in the last week of March.
“The dossier gave the finance minister a clear picture about the functioning of various circles. He then gave inputs based on performance. Some officials were held up as models while others were mildly reprimanded. In general, the idea was to improve the state revenues,” a top Finance Department source said.
According to Dr Isaac, the only way out was to increase revenue income. One measure he had announced was the amnesty scheme for tax defaulters. Over Rs 7,000 crore was caught in legal issues, and Isaac wanted a share of this money to shore up the state’s bottom line.
“The actual tax component forms just a small portion of the amount, somewhere around Rs 2,000-Rs 2,500 crore. The rest is the penalty amount,” he said.
The amnesty has two major advantages. It encourages ‘suppressors’ to come clean without the state having to impose its might on erring traders in the form of raids. More importantly, it will help the Department to draw up a list of traders doing a business of over Rs 60 lakh monthly. It is estimated that there are more than one lakh dealers having turnover above Rs 60 lakh and are still paying presumptive tax by masking the actual sales.
The CST Department had already issued notices to around 20,000 such dealers, with evidence. As per the statute, they will have to pay tax at schedule rates without input tax credit and thrice the amount of tax as penalty.
“Trade organizations have pointed out the severity of this burden. So we have decided to implement an amnesty scheme,” the official said.
