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Isaac sets agenda for better sales tax collection

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T.M. Thomas Isaac
T.M. Thomas Isaac

Staff Reporter

Increase in tax collection not up to desired level

Blames abolition of entry tax

Proper system for collection of tax arrears sought

KOZHIKODE: Finance Minister T.M. Thomas Isaac has outlined an agenda for a more foolproof sales tax collection through which an increase in revenue can be affected so that the State can move ahead with its proposed plan of accelerated development.

Addressing a review meeting of the Sales Tax Department here on Monday, the Finance Minister said though there had been an increase in sales tax collection it was far from the desired level due to various reasons.

If sales tax collection increased by 20 per cent a year, revenue deficit could be overcome by 2010-11 as 70 per cent of the revenue earnings accrued from sales tax.

The Finance Minister said the main reason for sales tax collection not registering the desired increase was the abolition of entry tax. It was also responsible for a fall in collection of value added tax.

“The ordinance for imposing entry tax is with the President and I appeal to the Leader of the Opposition to support the government in the effort,” he said.

He pointed out that in Kozhikode district increase in tax collection had been marginal. The main reason for the drawback included lack of proper scrutiny of returns and this was due to non availability of detailed data.

Lack of scrutiny

For instance, only 30 per cent of the returns had been subject to scrutiny and this was a grave drawback. The assistant commissioner in the special circle did not seem to have taken returns scrutiny seriously. Returns scrutiny must be completed in a time-bound manner, he added.

Another reason was the deficiency in collection of luxury tax besides a proper system for collection of tax arrears.

Dr. Isaac blamed the prevailing style of functioning of the department that did not seem to place importance on priorities. Tax evasion would be viewed seriously and prima facie evidence of evasion would invite penal measures.

“Side by side, the amnesty scheme that is to be completed in three months, disposal of sales tax appeals in a six-month time limit, ombudsman for luxury tax among others are some of the measures through which tax collections can be increased 50 per cent,” he added.

A. Jayathilak, Collector, M. Mohammed Ashraf, Deputy Commissioner (general), and T.V. Kamala Bai, Deputy Commissioner (audit) were present.

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