Kerala objects to Rs 332 crore deduction in IGST settlement by centre

Thiruvananthapuram: Kerala has lodged a strong objection against the deduction of approximately Rs 332 crore from the Integrated Goods and Services Tax (IGST) settlement for November 2023.

The state's Finance Minister, K.N. Balagopal, expressed concerns over the lack of clarity regarding the deduction and its underlying calculations, asserting that it would significantly impact the fiscal stability of the state.

In a press address, Minister Balagopal highlighted the puzzlement surrounding the deduction and its basis, stating, "It was not clear as to why this amount was deducted in this manner or what are the calculations underlying such deduction."

The deduction, attributed to the "adjustment of advance apportionment to make up the shortfall in the IGST balance," raised serious concerns for Kerala. Balagopal highlighted that the deducted amount constituted a substantial portion of the state's revenue, adversely affecting its fiscal health.

A letter was promptly dispatched to Union Finance Minister Nirmala Sitharaman, urgently seeking intervention. The missive outlined the significant impact of the Rs 332 crore deduction on Kerala's financial state, urging immediate attention to the matter.

Minister Balagopal stressed the necessity for a comprehensive discussion and deliberation within the council before implementing such deductions. He emphasised the need for a planned strategy to address issues related to settlements, ensuring prudent measures for future recoupment.

Highlighting ongoing challenges, Balagopal underscored Kerala's persistent efforts in seeking resolution for curtailed resources and pending arrears from the Government of India. He pointed out that the deduction in the IGST settlement would further exacerbate the state's fiscal situation while awaiting pending decisions from the central government.