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The Hindu
The Hindu
National
The Hindu Bureau

Kerala cries foul over Centre’s decision to deduct ₹332 crore from IGST settlement

The Kerala Government is crying foul over a reported deduction of approximately ₹332 crore from the settlement of Integrated Goods and Services Tax (IGST) for November 2023 to the State.

Finance Minister K.N. Balagopal, in a letter on December 2, urged Union Finance Minister Nirmala Sitharaman to “reverse the decision” pointing out that this cut in IGST settlement “will further deteriorate the fiscal situation of the State.”

According to information received by the Kerala Government, the deduction has been attributed to ‘adjustment of advance apportionment to make up for shortfall in IGST balance.’ Mr. Balagopal pointed out that the deducted amount constitutes “a substantial chunk of the State revenue,” thereby adversely affecting the fiscal situation.

Complaining of a lack of clarity in the deduction and the calculations that have led to it, the State Government has urged the Centre to explain the rationale behind the decision.

In his letter, Mr. Balagopal observed that the shortfall in IGST balance mentioned by the Centre calls for deliberations in the GST Council, in-depth evaluation of the current system of IGST settlement, in addition to emphasising the need for plugging leakage in the GST system.

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