The Goods and Services Tax (GST) Council’s decision to slash the tax rate of white goods is likely to incur an annual revenue loss of about ₹250 crore for the State.
The council had on July 21 decided rate cuts for 17 white goods such as washing machines, refrigerators and television sets. The decision that came into force on Friday, as per preliminary estimates, is likely to incur a tax revenue loss of ₹500 crore for the State, of which the State’s share is about ₹250 crore. The Centre is estimated to sustain a total loss of ₹8,000 crore in this score.
The council decision goes against the stated position of Kerala that had strongly argued for reducing the tax rate of essential commodities in the benefit of the common man, but the council chose to decide in favour of slashing the rates of such goods.
Official sources told The Hindu here that an upward trend in tax collection is usually seen from the start of the festival season in August and it would normally pick up till December. Onam and Christmas are two festive seasons that witness a boom in the sale of electronic goods, but the tax benefit of the spurt in sales this season would not work to the advantage of the State government.
More importantly, traders are now filing only summary returns. All dealers are not uploading the specific details of their sales. This complex scenario eludes the possibility for a sector-wise analysis and also limits the scope for garnering the precise outcome of the tax cut.
Though the manufacturers have pledged that the benefit of the latest tax cut would be passed on to the consumers, it remains to be seen how much the consumers would be benefited by the decision. Non-availability of specific details is a major hassle for tax sleuths in analysing the data. GST officials in the State were now waiting to crack down on recalcitrant traders when they filed the annual returns in December, sources said.
The disruption of goods movement following the transport strike has already had a bearing on the tax revenue. The latest decision will only add to their woes.
The council decision to overlook the demand for slashing the rates of essentials and preferring the white goods instead was being construed as a bid to help the corporate majors, sources said.
