Goods Services and Tax. Photo: REUTERSThiruvananthapuram: Kerala expects a Rs 1,500 crore increase in its tax income per year once the ‘Goods and Service Tax’ (GST) is in force.
Though the tax of many basic and daily use products would go down from 14.5 percent to just 5 percent, the state has better plans in a variety of sectors. Bars across Kerala are scheduled to reopen on July 1, the same day of the GST rollout.
This is expected to mop up Rs 3,500 crore annually. The state is also expected to gain at least Rs 300 crore from online shopping which until now had no tax at all. As per the guidelines of GST, the customer has to pay tax to his home state. When Keralites buy commodities from shops in other states, if his Kerala address is marked on the bill, then tax is earned by the Kerala government.
The Tax Department of Kerala will soon launch a promotional program which urges the Keralites around the country to mark their Kerala address on the bill whenever they buy commodities. This would increase the tax income of the state government and ensure better after-sale services as well.
The Center has agreed to give compensation for the losses caused by the launch of GST in the state for the next five years; this too would put Kerala’s economy in a better position. The finance department estimates that an increase of 19 percent in tax income would do good for the Kerala economy. But even when GST comes into effect, this would seem like an impossible thing.
Delivery on demand
The online shopping companies have brought back ‘delivery on demand,' the option for payment only when the ordered goods reach the customer. Four years ago, the online shopping companies had decided to stop this in Kerala when the state government decided to impose tax on online products. When the payment was made at the time of delivery, it was assumed that the sale took place in Kerala and the government decided to impose VAT on those goods. This prompted a few online shopping cartels to withdraw the ‘delivery on demand’ service in Kerala.
