THIRUVANANTHAPURAM: Motor vehicles continue to be Kerala’s largest GST revenue generator, while gold accounts for the highest business turnover yet yields a disproportionately low tax share. Similarly, hotels and restaurants contribute relatively little to the state exchequer despite the heavy emphasis on tourism as a core pillar of the state’s economy.
An analysis of actual Goods and Services Tax (GST) collections from 11 major sectors during the first six months of the financial year 2026–27 highlights stark contrasts in tax contributions, prompting questions over whether the state is fully tapping its economic potential.
Key Highlights & Sector Breakdown:
- Total Revenue: The 11 analyzed sectors generated a combined Rs 19,583 crore in GST revenue between April and September, marking a year-on-year growth of 18.8%.
- Motor Vehicles: Topping the list, motor vehicles and auto spares contributed Rs 3,840 crore (19.6% of the total), recording a turnover of Rs 18,500 crore.
- Works Contract Services: Covering civil and infrastructure projects, this sector came in second with a GST contribution of Rs 2,660 crore (13.6%).
- Other Trade & Manufacturing: Contributed Rs 2,593 crore (13.2%).
- White Goods & Electronics: Generated Rs 2,430 crore (12.4%).
- Banking, Financial & Insurance: Contributed Rs 2,120 crore (10.8%).
- Together, these top five sectors accounted for nearly 70% of the total GST revenue.
The Gold and Tourism Paradox:
The gold sector presented a striking contrast during the review period. Gold, bullion, and jewellery recorded a massive turnover of Rs 32,500 crore—the highest among all analyzed sectors. However, its GST contribution stood at just Rs 1,000 crore (5.1% of the total), largely driven by a lower GST rate of 3%. This has raised concerns over whether tax potential is matching massive trade volumes.
Similarly, hotels, restaurants, and outdoor catering recorded a strong turnover of Rs 10,100 crore but contributed only Rs 770 crore (3.9%) in GST.
Stricter Tax Scrutiny Ahead:
The state tax department has identified specific sectors for intensified scrutiny. For the gold trade, officials plan to examine discrepancies between stock records, e-way bills, tax returns, and job-work transactions. Meanwhile, hotels, restaurants, and cloud kitchens linked to online food delivery platforms will face audits to check for under-reporting of cash sales.
”The challenge is not just to increase collections from sectors already contributing well, but to ensure that the enormous business turnover in sectors like gold and tourism is adequately reflected in tax revenue,” a GST source noted. The department aims to leverage data analytics across various tax returns to curb under-reporting, fraudulent input tax credit claims, and non-filing of returns.
Other notable sector contributions included Rs 1,540 crore from telecom, IT, and professional services, Rs 1,000 crore from electrical equipment, Rs 900 crore from pharmaceuticals, and Rs 730 crore from readymade garments and textiles.
