Kerala Finance Minister Mr M Thomas Isaac on Tuesday said there was at least a 10 per cent dip in the VAT collection from the state till September this fiscal compared to the previous years. While there was a 20 per cent increase in VAT coll ections during the past three years, it was only 10 per cent till September this fiscal.

This was due to the tax concession to the tune of Rs two lakh cr granted by the Centre, he said.

Those involved in the poultry trade had evaded tax to the tune of Rs 13 cr, adding at least five persons, involved in smuggling poultry to the state witho ut paying tax have been arrested and more arrests would follow.

About 576 lorry loads of chicken were smuggled into the state in a year causing the exchequer a loss of about Rs Nine cr on this count, he said.

Union Government had directed the state governments to avail of loans to set off the loss in the tax collection following the concession rendered by the Centre, he said.

There was no provision in the constitution empowering the states to take loans for the day-to-day expenses of the governments.

Hence, there was need for availing loans from the financial institutions and distribute to the states as grants-in-aid, he said.