The Hindu Business Line : Tax evasion in pepper trade to cost Kerala Rs 10 crore

RAMPANT tax evasion in pepper trade in Kerala is to deprive the State of total tax revenue of an estimated Rs 10 crore in the current fiscal, according to pepper trade sources here.

Introduction of `C Form' and `F Form' has led to large-scale evasion of sales tax as majority of buyers here and their counterparts in the upcountry markets are not registered traders, Mr Kishor Shamji, President, India Pepper and Spice Trade Association (IPSTA), told Business Line.

In fact, only 20 per cent of the production in the State's Wayanadu and Idukki districts are coming to the terminal market while the rest is moved out evading tax. The crop from Meenangadi, Bathery, Kalpetta and Mananthavadi is taken out to Bangalore while the pepper from North Malabar to Mangalore for transporting to North Indian markets such as Mumbai, Nagpur, Jalgaon, Indore, Gwalior, Jaipur and Delhi, he said.Produce from southern districts is sent via Thenmala, Aryankavu, while that from Idukki is transported to Cumbum, Bodimettu, Ramakkal Mettu.

He said that to cover cardamom also pepper is used from Idukki, thus both the commodities are transported without paying any tax. According to him, from the primary centres, the products are transported at the rate of Rs 3 to Rs 4 per kg by truck operators who carry the consignments without any valid documents,he alleged. It is also carried by rail from selected points in Kerala, he said.

Kerala produces an estimated 45,000 tonnes of pepper and about 80 per cent of it is taken out evading the tax. Similar operations are going on in the pepper growing area of Coorg in Karnataka, he said.

The State sales tax department had set up two more check posts at the Kerala borders with Karnataka in Wayanad district and yet evasion is going on un-hindered, he pointed out.

The Tax department sources said that check posts had been set up at all main thoroughfares on the borders with Karnataka and Tamil Nadu, but those who evade the tax take the by-routes, which are known only to such operators.

Mr Shamji said that it was unlikely that value- added tax (VAT) would be introduced in the near future and hence the government should do away with the C- Form and F-Form as the requirement of these forms has perpetuated rampant tax evasion.

More Stories on : Spices & Condiments | Economic Offences | Taxation | Kerala

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