Kerala's Revenue Struggle Amid GST Rate Cuts
Kerala's Finance Minister, K N Balagopal, highlights the anticipated annual revenue loss due to recent GST rate cuts. The state fears impacts on sectors like cement, electronics, and insurance. While welcoming lower consumer prices, the minister raises concerns about potential price hikes and uneven benefits distribution among states.
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Amid recent GST rate cuts, Kerala anticipates an annual revenue loss ranging between Rs 8,000 crore and Rs 10,000 crore, according to state Finance Minister K N Balagopal. The revised two-rate structure of 5 and 18 per cent is set to lower prices for numerous items starting September 22.
At a media briefing, Balagopal, a member of the ruling Left Democratic Front, expressed state support for the rate cuts but stressed the importance of ensuring their benefits reach consumers. Concerns were raised about potential product price hikes preceding the cuts, as states seek compensation for revenue deficits.
Balagopal also pointed out a disproportionate revenue impact on Kerala due to its consumption pattern. Suggestions included exempting Kerala's lottery from certain rate changes and increasing states' shares in GST revenue. Union Finance Minister Nirmala Sitharaman noted unanimity in the GST Council's decisions.
(With inputs from agencies.)
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