Monday, August 28, 2006

Kerala banks on lucky coupon to boost revenue

In order to boost tax revenues, Kerala would introduce a novel scheme Tuesday where all cash purchases above Rs.1000 with bill from shops having value addition tax (VAT) registration would get a lucky scratch coupon.

'In Kerala, there are 130,000 traders who have VAT registration. This is the first time in the country that such a scheme is being introduced by a state government. All states are now looking forward to find out how this scheme would work,' said state Finance Minister Thomas Isaac to reporters here Monday.

He said they expect the tax revenue to go up by more than 50 percent and would bring in an additional Rs.16 billion as compared to previous year.

In the last fiscal the total tax revenue was Rs.30 billion in the state.

Among those who are currently exempted from VAT in the state are gold shops, cement dealers, luxury hotels and liquor. These shops follow the compounding method of tax.

'One in 15 coupons would get a prize and in order to see that this is fair to all, we have seen that all purchases in a month when added up to Rs.1000 or more would get a lucky coupon. The minimum prize would be Rs.10 and the maximum would be Rs.100,000,' the minister said.

Isaac added the financial position of the state is precariously placed and the total public debt of the state has crossed Rs.50 billion.

He asserted he does not believe in coming out with a white paper on the state's finances as demanded by the opposition.


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