Kerala Public Expenditure Review Committee urges State government to address issue of revenue loss
The Kerala Public Expenditure Review Committee has underscored the need for Kerala to pay close attention to the Integrated Goods and Services Tax (IGST) mechanism, observing that the present system actually works towards revenue loss for the State.
“The committee based on certain assumptions regarding value addition within the State and the return filing behaviour of traders estimated the gross loss on account of IGST from July 1, 2017, (when GST came into effect) to till date could be about Rs. 20,000 crore to Rs. 25,000 crore,” the sixth committee chaired by D. Narayana said in its first report on the 2019-20, 2020-21 fiscals tabled in the State Legislative Assembly on July 11.
The committee noted that the manner in which IGST has been designed and implemented in India does not provide any room for benefitting a consumer State like Kerala. Furthermore, the Kerala government is hamstrung by the lack of ‘detailed and disaggregated data’ on the functioning of the IGST clearing mechanism, it noted. This stands in the way of the State government in monitoring the tax revenue.
