Karnataka CM Pushes for GST Reform with State Safeguards
Karnataka Chief Minister Siddaramaiah urged the Centre to couple the proposed GST rate rationalisation with robust revenue protection for states, emphasizing safeguards like a supplementary levy on luxury goods and compensation for revenue losses over five years, as opposition-led states meet to discuss concerns.
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Karnataka Chief Minister Siddaramaiah has called for a substantial revenue protection framework to accompany the Centre's GST rate rationalisation plan. His statement comes ahead of the anticipated GST Council meeting, urging safeguards to prevent state financial losses.
Addressing these issues, Siddaramaiah advocated for supplementary levies on sin and luxury goods and a guaranteed five-year compensation mechanism. This bid aims to shield states from estimated revenue losses of 15-20% under the Centre's proposal, which opposition-ruled states assert could result in a Rs 2 lakh crore annual shortfall.
The proposed two-tier GST structure would alter the existing four-slab system, with Siddaramaiah emphasizing that meaningful reforms require protecting states' fiscal interests. The Chief Minister called for cooperative federalism, highlighting Karnataka's concerns about fund devolution and its impact on development and welfare initiatives.
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