Kerala is facing issues with low tax revenue from GST compared to its GDP, which hurts its fiscal health. This is partly due to natural disasters the state has faced and increased tax evasion after checkposts were removed. While the GST department is training officers to reduce evasion, a lack of action to check evasion in industries like gold trading remains a problem. The state's own tax revenue, including GST, excise taxes, and vehicle/property taxes decreased in 2019-2020 according to auditors.

1. According to the article titled Kerala’s GST Revenue Conundrum by K J Joseph and Anitha Kumary L,
Kerala is facing the issue of low own tax revenue to GSDP, which adversely affects the fiscal health of the
state concerned 1. The non-achievement of a desirable growth in the GST revenue can be attributed
partly to the string of natural disasters faced by the state. Another reason is evasion which has increased
manifold after the abolition of checkpost-based surveillance. The GST department is training its officers
to plug evasion.There will be a significant increase in collections within two years 1. The absence of any
concrete action to check tax evasion in some businesses like gold trade is another issue 1. The state’s
own tax revenue consists of state GST, state excise, taxes on vehicles, stamp duty and registration fees.
After showing an increasing trend for five years, the state’s own tax revenue (SOTR) decreased by 321
crore in 2019-20, according to the CAG Report on State Finances for FY20. GST contributed an average
40% to the state’s own tax revenue in the 2018-19 and 2019-20 fiscals 1.