Kerala FM Advocates for State-Favored GST Sharing Ratio

Kerala Finance Minister K N Balagopal has urged a revision of the GST central-state tax sharing ratio from 50:50 to 40:60 in favor of states. This move, discussed at the GST Council meeting, is expected to benefit Kerala significantly through changes in IGST returns and the classification of taxed goods and services.

Kerala Finance Minister K N Balagopal has advocated for a revision in the central-state tax sharing ratio of the Goods and Services Tax (GST). Speaking at a GST Council meeting in New Delhi, Balagopal proposed that states receive 60 percent of the GST revenue, up from the current 50 percent.

Balagopal emphasized that this adjustment would significantly benefit Kerala, particularly through the accurate filing of GSTR-8 returns by e-commerce operators. These returns will now include details about the consumer's state, ensuring Kerala receives its fair share of the Integrated Goods and Services Tax (IGST).

The minister highlighted that the state had conducted various studies pointing out flaws in the current system. The GST Council has agreed to re-examine the issue within ten days, aiming to rectify the lapses in the IGST system and ensure fair revenue distribution.

The union government also indicated a decrease in central IGST revenue, leading to a collective agreement to investigate potential system flaws. The next GST Council meeting is scheduled for August or September, where further assessments will be conducted.