Seeking a rollback of the 5% Goods and Services Tax (GST) imposed on pre-packed, labelled food products, Kerala has registered its objection to the Centre’s decision that is bound to strain home budgets and affect several sections.
Finance Minister K.N. Balagopal, while responding to questions on GST in the Assembly on Monday, said the State had strongly opposed the move at the meetings of the council. The State had demanded the reinstatement of luxury goods under the highest GST slab rate of 28%. The tax levied on such items had been decreased to 18% and 12% in the run-up to various elections.
“While the Centre has been deferring decision on the demand, it has gone ahead with the proposal to impose 5% GST on essential commodities. The move that differed from the decision taken at the GST Council meet is bound to affect the common populace,” he said.
Various options
While the State government pursued various options to boost tax collection, such measures would not be at the cost of the public. Effective measures will be adopted to mitigate the impact of a possible price rise of essential commodities., he said
Mr. Balagopal pointed out that the State did not benefit through tax revenue as much as what was expected by a consumer State through the introduction of the GST regime. The failure to fully realise the online returns mechanism and the difficulties created by COVID-19 and natural calamities had led to the unsatisfactory returns.
The Minister said the State has not received its due protected revenue (compensation provided to States for shortfall in reaching the 14% revenue growth target) since June. It had previously received ₹12,850 crore (during 2021-22), ₹12,828 crore (2020-21) and ₹8111 crore (2019-20) in this regard.
