Over 3.2 lakh dealers in Tamil Nadu did not pay a single rupee in GST last year

About 1.94 lakh had paid less than ₹1,000 throughout the year

Around 30% of the dealers registered with Tamil Nadu’s Commercial Taxes Department (3.26 lakh) did not pay a single rupee in the Goods and Services Tax (GST) during 2021-22. Besides, about 1.94 lakh dealers had paid less than ₹1,000 throughout the year.

These findings have been made through a recent study done by the Department of the tax remittances.  There are about 11 lakh registered dealers in the State, of whom 6.72 lakh come under the State jurisdiction and the rest under the Centre. The threshold for the registration of taxpayers dealing in goods is ₹40 lakh and for those dealing in services ₹20 lakh. 

Though the previous financial year’s revenue collections of the GST, in terms of year-on-year growth,  saw a positive rate of 15.83%, the highest in a full financial year since the GST was introduced in July 2017, the authorities were plugging the loopholes in the tax collection mechanism. Hence, the study was carried out.  The GST revenue collections comprise three components — State GST (SGST), Integrated GST (IGST) settlement and ad-hoc IGST settlement.  Compensation has not been taken into account for calculating the GST revenue collections. 

Besides, a perusal of the monthly GST collection data, as released by the Centre in the last six months, reveals that Tamil Nadu had registered a tepid growth over the corresponding months in the previous year, whereas Maharashtra and Karnataka, despite having a higher base, had performed better than Tamil Nadu. 

Asked whether the nil or negligible payment of tax can be considered tax evasion, a senior official of the Commercial Taxes Department said, “Right now, such a conclusion cannot be arrived at. For that, we will have to peruse accounts of the dealers thoroughly.”

After the study, the Department sent communication to 5.2 lakh dealers, “requesting” them to check their accounts.  This initiative had its own impact, prompting 22,430 dealers to pay about ₹64.22 crore in May. “For the time being, persuasion is our policy with regard to getting back the tax due to the government,” points out the official.