With Kerala not benefiting from the Goods and Services Tax (GST) regime as expected, the Estimates Committee of the state legislature has called for a comparative study of the state’s tax revenue growth before and after the introduction of GST and projections of what the revenue would have been had the GST not been introduced.
The committee (term 2023-2026), which presented its report to the Assembly on October 7, asked the government for an urgent report in this regard.
As part of its recommendations, the committee asked the government to introduce a system of electronic transport documents for gold and other precious metals, tighten enforcement through regular inspection and take steps to ensure that the state does not lose tax revenue from online transactions.
Loss of income
The delay in the introduction of electronic waybills for gold and other precious metals is causing revenue loss to the state, the committee said. In fact, neighboring states like Karnataka benefited from this scenario. The electronic waybill system was introduced on 1 April 2018 for all interstate movement of goods exceeding ₹50,000. From 15 April 2018, it was mandatory for domestic movement of goods worth over ₹50,000.
Further, the committee sought the speedy introduction of state tribunals under the GST regime and exemption from GST for infrastructure works using MLA, MP funds.
The committee concluded that Kerala’s hopes of benefiting from the GST regime as a consumer state have been dashed. There are several reasons why Kerala has not seen the expected growth in tax revenue despite showing an increase over the years. Further, after the implementation of GST in 2017, tax revenue from some sources has declined while it has been lost in case of some other business sectors, said the committee headed by KK Shailaja, MLA. In this context, the panel recommended a comparative study of pre-GST and post-GST revenue growth and an assessment of revenue growth in a hypothetical scenario where GST was not implemented.
Non-GST revenue
According to the report, Kerala’s GST revenue has increased from ₹12,007.7 crore in 2017-18 to ₹30,944.48 crore in 2023-24. Non-GST revenue from sources such as Kerala General Sales Tax and Value Added Tax increased from ₹24,580.7 crore to ₹27,626.61 crore during the same period.
The committee also suggested that sectoral inspections should be made a regular affair to check tax evasion. Her report to the House pointed to tax raids (Operation Palma) in 2024 that uncovered fraudulent transactions in the scrap metal trade. Such checks should be carried out simultaneously at all locations, he said.
Published – 18 Oct 2025 19:22 IST
