Kerala Finance Ministerโ Addresses GST Reform concerns, Revenue Impact
Kerala finance Minister KN Balagopalโข hasโ responded โขto โconcerns regarding the impact of Goods and Servicesโ Tax (GST) reforms on โคstate revenues, emphasizing the need for a thorough โexamination of the โbenefits andโค drawbacks ofโ current policies. While welcoming GST reform in principle, Minister Balagopal highlighted โpotential financial losses for Kerala resulting โขfrom recent โchanges.
According to โthe Finance Minister, Kerala stands toโ lose approximately Rs 2,500 crore in โrevenue across four key โsectors: automobiles, cement, electronics, and insurance. He โnoted that whileโค increased taxes on certain goods might initiallyโฃ appear beneficial, companies frequently enough absorb thes โคcosts by adjusting prices, ultimately impacting overall revenue collection. The Ministerโฃ expressed concern that the central government’sโค approach doesn’t fully account for these dynamics.
Minister Balagopal also stated that theโ state government has โขnot received a satisfactory response to its requests for a extensive study assessing the impact of GST reforms onโฃ state โfinances.โ He stressed โthe importance of data-driven decision-making, rather than relying on “popular declarations” or superficial consultations.He arguedโฃ that a detailed analysis is โcrucial to understanding the true effects of the reforms.
Disagreements โbetween the state and central governments extend to specific tax rates. Kerala’s request โfor a higherโข tax โฃrate on tobaccoโ products – perhaps up to โข40% – โwasโข not accepted,with the central government indicating that any additional revenue generated wouldโข not be shared with โฃthe โstates.โ โ Similarly, โthe state’s proposal โto maintain a 28% tax on lotteries โwas also rejected, with the Minister pointing out the potentialโฃ negative impact on the sector.
Minister Balagopal further illustrated โฃthe financial implications by comparing current GST revenueโฃ with pre-GST figures. โ Heโ stated that prior to GST implementation, Kerala would โคhave received approximately Rsโ 600,000 crore in revenue.However, the actual revenue received since GST implementation โhas beenโค Rs โ32,773 crore. The central governmentโฃ has also resistedโ calls for states to โreceive a greater share of revenue from taxes on cigarettes โand tobacco.
The Finance Minister reiterated Kerala’s commitment to โคconstructive dialog with the central government to address these concerns and ensure a fair and equitable GST framework that benefits both the state and the nation.
Enjoyed this article? We work โhard toโค bring you โtimely and insightful newsโค coverage. If โคyou found this piece informative, please consider sharing it with your network, leavingโข a comment below with your โthoughts, or subscribing to our โฃnewsletter for more updates from world-today-news.com. Your support โhelps us continue โdelivering quality journalism!