₹956.16 cr. cut from Kerala's IGST share, says Finance dept.
Finance Minister K.N. Balagopal said here on Wednesday that the Centre slashed IGST shares of all States on the grounds that excess amounts had been credited to them. Under this decision, Kerala's IGST share was reduced by ₹956.16 crore. However, there was a lack of clarity regarding the excess settlements, he said.
Levied on the interstate supply of goods and services, IGST is collected by the Centre. The accounts are settled periodically and the revenue is shared between the Centre and the States. In July 2024, the Kerala Public Expenditure Review Committee had advised the Kerala government to closely monitor IGST inflow as the present system resulted in revenue loss for it.
Talking to reporters here, Mr. Balagopal alleged that the Centre also slashed ₹3,300 crore from the State's borrowing limit in the name of the Guarantee Redemption Fund. The Centre had set a condition that a corpus equivalent to 5% of the government guarantee to financial institutions should be set aside for the fund. Failure to do so would result in a reduction from its borrowing limit equivalent to 0.25% of the GSDP.
The open market borrowing limit of the State for the first nine months of the 2025-26 fiscal (April-December) had been pegged at ₹29,529 crore.
On the charge that Kerala was plunging towards a debt trap, Mr. Balagopal said that the debt-GSDP ratio of the State had in fact witnessed a steady decrease since 2020-21 from 38.47% to 33.9% in 2024-25.
Replying to a question, Mr. Balagopal said formal discussion had not been held yet on the formation of the new pay revision commission.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Economic Times
5 minutes ago
- Economic Times
GoM to propose GST exemption on health and life insurance premiums: Bihar Dy CM
The GST Group of Ministers is considering exempting health and life insurance premiums from the GST levy, a move that aligns with the Centre's push for simplifying the tax regime and providing relief to various segments of society. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads The Group of Ministers (GoM) on Goods and Services Tax GST ) will propose exempting health and life insurance premiums from the levy, Bihar Deputy Chief Minister Samrat Choudhary told reporters on states, however, expressed differing views on the proposal comes amid the Centre's push for 'next-generation' GST reforms, which Finance Minister Nirmala Sitharaman said are aimed at simplifying the tax regime, reducing compliance burden and providing relief to the common man, farmers, the middle class and GoMs at Vigyan Bhawan in New Delhi, Sitharaman said the reforms rest on three pillars: structural changes, rate rationalisation and ease of GST is levied at four rates, 5%, 12%, 18% and 28%, with essentials taxed at the lowest end and luxury or sin goods in the highest slab plus cess. The Centre has proposed a two-rate system of 5% and 18%, along with a special 40% slab for select demerit two days, the three GoMs on insurance, compensation cess and rate rationalisation are examining issues ranging from exemptions on insurance premiums to the future of compensation cess and removing duty inversion in sectors hit by uneven SBI Research report estimated that the latest rate-cut proposals could lower the effective weighted GST rate to 9.5% and lead to an annual revenue loss of about ₹85,000 crore, with an immediate shortfall of ₹45,000 crore if introduced from October GoMs' recommendations will be placed before the GST Council at its meeting next month, ahead of a planned rollout of reforms by Diwali, as announced by Prime Minister Narendra Modi.
Time of India
11 minutes ago
- Time of India
GoM to propose GST exemption on health and life insurance premiums: Bihar Dy CM
The Group of Ministers (GoM) on Goods and Services Tax ( GST ) will propose exempting health and life insurance premiums from the levy, Bihar Deputy Chief Minister Samrat Choudhary told reporters on Wednesday. Some states, however, expressed differing views on the plan. The proposal comes amid the Centre's push for 'next-generation' GST reforms, which Finance Minister Nirmala Sitharaman said are aimed at simplifying the tax regime, reducing compliance burden and providing relief to the common man, farmers, the middle class and MSMEs. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Buy Resmed AirSense 11 with flat 20% off ResMed Buy Now Undo Addressing GoMs at Vigyan Bhawan in New Delhi, Sitharaman said the reforms rest on three pillars: structural changes, rate rationalisation and ease of living. Currently, GST is levied at four rates, 5%, 12%, 18% and 28%, with essentials taxed at the lowest end and luxury or sin goods in the highest slab plus cess. The Centre has proposed a two-rate system of 5% and 18%, along with a special 40% slab for select demerit goods. Live Events Over two days, the three GoMs on insurance, compensation cess and rate rationalisation are examining issues ranging from exemptions on insurance premiums to the future of compensation cess and removing duty inversion in sectors hit by uneven rates. An SBI Research report estimated that the latest rate-cut proposals could lower the effective weighted GST rate to 9.5% and lead to an annual revenue loss of about ₹85,000 crore, with an immediate shortfall of ₹45,000 crore if introduced from October 1. The GoMs' recommendations will be placed before the GST Council at its meeting next month, ahead of a planned rollout of reforms by Diwali, as announced by Prime Minister Narendra Modi.
Mint
35 minutes ago
- Mint
US tariffs a ‘major shock' but opportunity for India to ‘get out of comfort mindset', says Uday Kotak
Uday Kotak has joined the chorus calling on the Centre to channel budgetary support towards MSMEs, in order to brace against impact from United States President Donald Trump's hiked tariffs. Speaking to the Financial Times (FT), the billionaire industrialist and founder of Kotak Mahindra Bank, said the development is an 'opportunity' for India to 'get out of our comfort mindset' and expand support for small and medium entreprises. Uday Kotak said the hiked US tariffs came as a 'major shock' to many Indians, who 'woke up' to the impact of Donald Trump's trade war on the domestic economy. 'We (India) must think about this as an opportunity for us to get out of our cruise mindset and from a comfort mindset to 'we are at risk',' he told FT. He said that direct monetary support — capital, private equity and risk capital — from the government to small and medium industries would 'turbocharge' manufacturing, research and technology in India. According to Kotak, the tariff uncertainty has created urgency to 'transform India' and pivot, stating, 'India's macroeconomic situation is very comfortable. Our fiscal deficit is under control, our current account is under control, you've got macroeconomic stability. Policymakers and businesses should use the trade war to get focused on productivity, efficiency, excellence and building world-class brands.' He added that India with per capita GDP of $2,700, 'cannot be in a comfort zone', when compared to China ($13,000) and US ($89,000). 'At the current 'cruise' level, we'll keep on improving our position, but is it fast enough for us to get past the middle-income trap? I think there's a gap,' Kotak told the publication. Donald Trump last month announced that the US would charge India a total of 50 per cent tariffs — 25 per cent reciprocal duties and an additional 25 per cent as 'punishment' for trade with Russia amid the Ukraine invasion. In light of this, earlier in August, Mahindra Group Chairman Anand Mahindra also called on the government to direct liquidity towards MSMEs; and RPG Entreprises Harsh Goenka also expressed support for a fund to help exporters shift from China and find new markets.
