The Commercial Taxes Department of the Kerala Government has launched a drive to check sales tax evasion through railway parcel service.

The department officials conducted surprise inspections at all the railway stations in the State from 3 a.m. on Monday and till 1 p.m., 3,784 packets worth Rs 3.32 crore were seized.

The Finance Minister, Dr Thomas Isaac, said in the light of the seizures, it was estimated that goods worth between Rs 1,500 crore and Rs 3,000 crore were being ferried through the railway annually without paying tax. And at a tax rate of 12.5 per cent, the Government was losing substantial revenue, he added.

`BIG RACKET'

The Minister said the Railways had recently started leasing out parcel wagons to private contractors. However, proper documentation relating to the goods had not been made mandatory for such wagons and this was leading to large-scale tax evasion.

As checking has been made stringent at the State's check-posts, goods movement through the railway increased considerably, he said.

COURT ORDER

The Minister pointed out that the Kerala High Court had, on January 20, 2006, given instructions on the procedures to be observed for goods movement through the railway. Accordingly, the Commercial Taxes Department officials were entitled to collect complete details about the sender and receiver consignments.

Besides, the department should be allowed to set up check-posts in the railway station premises to inspect the goods for taxation purpose. More importantly, the court had said the Ministry of Railways should implement, within six months, a uniform code for the entire country on the procedures to be followed for goods movement.

Dr Isaac said the recommendations had not been implemented and it was in this context that the State Government decided to conduct checks in the railway stations.

He said the checks would continue in the coming days though there had been opposition from some railway officials. In between, talks would be held with the Railways authorities and if they proved futile, the Government would consider resorting to legal measures.

The issue would be raised in the ensuing meeting of the Empowered Committee of the State Finance Ministers, the Minister said.