Kerala FM calls for extension of GST compensation scheme

Kerala Finance Minister KN Balagopal on Saturday pleaded for the extension of GST compensation beyond June next year, stressing that the state was already grappling with a significant shortfall.

Speaking to the media here, the minister said the state is not getting its due following recommendations from the 15th Finance Committee on devolution.

Kerala will receive GST (Goods and Services Tax) compensation of over Rs 13,000 crore and another one-time subsidy of over Rs 19,000 crore in the current fiscal year ending March 2022, he noted.

If GST compensation ends next year, the state will face yet another shortfall, he said and expressed hope that the compensation regime would be extended.

The compensation scheme to states for the shortfall resulting from the incorporation of their taxes such as VAT into the uniform national GST tax will end in June of next year.

However, the tax that is currently levied in addition to the GST rate on certain luxury and sin products to fund the compensation amount for the states will continue to be levied until March 2026. The collections will be used to reimburse the loans that have had to be made since 2020-21 to pay the state indemnities.

(Only the title and image of this report may have been reworked by Business Standard staff; the rest of the content is automatically generated from a syndicated feed.)

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About Natalee Broderick

Natalee Broderick

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