GST reforms to incur 8,000 Cr financial loss on Kerala: minister

Thiruvananthapuram: Kerala Finance Minister K N Balagopal said that it is estimated that various state governments will lose two lakh crores in revenue due to the new GST reforms. Kerala alone will meet an estimated Rs 8000 crores, he said. The central government should make up for this loss, or it will affect social welfare schemes, employees' salaries and pensions, the Kerala minister warned.

Balagopal then said that people should benefit from the tax reduction that will be achieved through GST tax reform. There is a situation where big companies often do not pass on the benefit of the tax reduction to the public. There is a tendency to first sell goods at a lower price and then change the name and sell them at a higher price. He said that this should not happen this time.

According to Balagopal, there was an Anti-Profiteering Committee to check whether the people were getting the benefits of GST, but the Centre dissolved it after this system failed. Now, it has implemented the fresh reforms without holding sufficient discussions, he said.

However, no state, including Kerala, opposed the reforms because they benefit the people, he added.

From automobiles and electronics to food items and medicines, as many as 375 goods and services will become cheaper from Monday, September 22, following the implementation of the new GST framework.

The major rate rationalisation, approved by the GST Council earlier this year, has simplified the tax structure from four slabs to just two — 5% and 18%. A special 40 per cent rate will continue to apply to a select list of luxury and sin goods.