Kerala losing tax revenue: CAG report

T�PURAM: Small Mahe is being used to evade tax legitimately due to Kerala, the Comptroller and Auditor General�s report for the year ended 2009 says.



Mahe�s status as part of the Union Territory of Pondicherry whose sales tax is lower than that of Kerala is being used to cheat Kerala of tax revenue, the report tabled in the Assembly on Monday said.



Unscrupulous dealers are using Mahe, which is geographically situated within Kerala, as the declared destination of goods to get the tax concessions, but diverting them to other parts of Kerala. Movement of goods to Mahe through the NH 17 is regulated by the checkpost at Kunjippally, situated 4 kilometres away from the actual border of Mahe. Pocket roads that exist between the checkpost and the Mahe border are being used to divert good-laden vehicles to places within Kerala.



Audit scrutiny of five commodities revealed that during the period from January 2008 to December 2008, taxable goods valued at Rs 374.02 crore involving a tax effect of Rs 119.02 crore in Kerala, intended for delivery in Mahe, was transported through the Kunjippally checkpost. This include 7,50,89,000 litres of petrol and diesel; 48,11,976 litres of Indian-made Foreign Liquor; 94,15,314 kilogrammes of chicken; 1,02,404 cases of ghee and 7,90,240 sqm of tiles.



Mahe has an area of about 9 sq km and population of 36,823 with a total vehicle strength of 341. ``Considering the population and vehicle figures, it can be easily inferred that such huge quantities of goods cannot be consumed in Mahe. Thus, Mahe is being used as a pocket for evasion of tax legitimately due to the Kerala state exchequer,�� the report said.