Government to take strict measures to prevent tax evasion in gold jewellery sales, says Kerala Chief Minister

Possibility of making CCTV footage in large jewellery shops available at GST office and police stations explored

Chief Minister Pinarayi Vijayan has said that the government will take stringent measures, including augmented inspections in jewellery shops, to prevent tax evasion in gold jewellery sales.

Mr. Vijayan announced the decision at a high-level meeting held in Thiruvananthpuram on Tuesday to discuss the issue, an official press release informed. He said at the meeting that the sales tax intelligence in the State would be strengthened.

The Chief Minister ordered officials to carry out strict inspection in places where tax evasion was possible. Actions including cancellation of Goods and Services Tax (GST) registration should be taken against people involved in tax evasion, he directed. He also said that adequate incentives should be given to officials who make more tax collection.

Mr. Vijayan also explored at the meeting the possibility of making CCTV footage in large jewellery shops available at the GST office and police stations.

He said there was a trend to deliver gold directly to houses for weddings and other social functions. Such practices deprived the public exchequer of its rightfully due tax revenue. Hence, he had asked the sales tax intelligence to identify tax evaders for possible prosecution.

Mr. Vijayan said most gold traders had welcomed the move. They did not view it as harassment. Only tax evaders need be concerned, he added.

Finance Minister K.N. Balagopal, Chief Secretary V.P. Joy, Tax Department Secretary Sharmila Mary Joseph and State GST Commissioner Ratan Kelkhar took part in the meeting.

Merchants flay decision

The All Kerala Gold and Silver Merchants Association (AKGSMA) has reacted sharply to the statement of the Chief Minister, which it said was casting aspersions on the integrity of the jewellery shops in the State.

AKGSMA State general secretary K. Surendran said the State government was relying heavily on the reports of officials on the dent in tax collection. “The revenue collection would have come down with the GST replacing taxes such as value-added tax [VAT] two years ago. That does not mean gold and silver merchants are not paying taxes,” he said.

At present, he said the GST was 3% equally divided between Integrated Goods and Services Tax (IGST) and State Goods and Services Tax (SGST). However, the VAT was 5% in the State. “Now we are paying taxes for gold imported by agencies in Maharashtra, Karnataka, and Tamil Nadu. The entire bullion is coming from other States,” said Mr. Surendran.

The decision of the government asking jewellery owners to link the CCTV cameras of their showrooms to police stations and GST offices amounted to infringing on privacy rights, he added.