Tax collection in the State is expected to touch 20% with the introduction of Goods and Services Tax (GST) regime from July 1, Finance Minister T.M. Thomas Isaac has said.
Dr. Isaac told reporters here on Friday that being a consumer State, the destination-based tax system would give a major boost to tax collection. Moreover, States had been delegated the power to tax services. Given the high density of telecom and banking sectors, the State was bound to make considerable gains.
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Eating out to be costly
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One area of concern was the proposed 5% tax on hotels that had a sales returns of ₹20 lakh from the current 0.5%.
Keralites would have to spend more money for eating out, but the new system would not affect the tourism sector. Check-posts would be in place till the e-way billing system came into force, he said.
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Coir and cashew
The creative role played by the State in the GST Council had helped fix the tax for government-run lottery at 12% and 28% for those being managed by intermediaries. The State could secure notable gains for its own products such as coir and cashew, but tax relief for plywood and Ayurvedic medicine had not been granted so far.
The notion that prices would shoot up on switching over to the new system was unfounded. Owing to subsumation of various taxes and hassle-free input tax credit from the manufacturing to consumption stage, the tax burden would come down substantially and that would bring down the prices, he said.
About 76% of the dealers in the State had enrolled on the GST portal and others could complete enrolment when the portal opened from June 25.
All arrangements had been made to receive data provided by dealers at the Central portal. The returns for June could be filed up to September.
Training had been imparted to 1,792 officers and a trade awareness campaign too had been conducted. GST would be launched officially at Ernakulam on July 1, he said.