Kerala has demanded increase in GST share: Minister K N Balagopal

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The state has demanded the Centre that the state’s share of the revenue from the GST, which is 50% at present, should be increased to 60% since the share of expenditure of the states is very high when compared to the Centre, finance minister K N Balagopal told the assembly on Tuesday.

Replying to a calling attention motion moved by P Nandakumar, the finance minister said that the demand was raised by the state in the last GST council meeting. “As per the 15th finance commission report, 62.7% of the total revenue of the country goes to the Centre, at a time when the 62.4% of the total expenses are borne by the states. Because of this, we have said that the GST sharing should be on a 60:40 ratio and not 50:50 ratio, between the states and the Centre,” he said.

He added that the state has also demanded that the GST compensation to the states that will come to an end next year, should be extended to five more years.

He said that the states had to give up 52% of the revenue that it used to earn before implementation of the GST, while the Centre had to give up only 25% of its revenue prior to the GST. He said that all the states, including the BJP-ruled states, have raised their voices regarding the heavy loss of revenue for the state in the GST council. “There is a huge gap between the revenues between the Centre and the states. At present, there is a strong attempt to slash our borrowing limits. The assembly should together take a strong stand against the Centre trying to strangulate the states,” Balagopal said.

He said that the Centre used the provision in the Constitution to impose additional cess on the petroleum tax. In 2011-12, only 10% of the total revenue of the Centre was through cess, which has now increased to more than 20%. As much as Rs 5.3 lakh crore was raised by the Centre through the cess in 2021-22 alone. This money also should be shared with the states, he said.

However, even though the states raised similar demands in the last GST council, the Union finance minister did not give any clear response to the demands yet, he said. The Supreme Court also has clarified that if the states are entitled for their due share of revenue and the GST council’s decision is only advisory in nature, it cannot nullify the rights of the states, Balagopal said.

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