Kerala Suffers Loss up to Rs 25,000 Cr in IGST: State Fiscal Review Committee
By: Admin Date: July 15, 2024 Categories: GST Recent News
The State Fiscal Review Committee report has found that Kerala suffered a significant loss in the Integrated Goods and Services Tax (IGST) due to shortcomings in the system. The committee suggested that a concerted effort in the GST Council by consumer states, including Kerala, is required to resolve this issue.
The 2020-21 report, submitted to the Legislative Assembly by the Finance Department, estimates a loss between Rs 20,000 and 25,000 crore from July 1, 2017, to 2020-21. Until June 2022, compensation from the Centre was received. The committee warns that with the cessation of this compensation, the loss will increase. Earlier, information from the report had leaked, leading to controversy. The report was submitted by a committee chaired by Prof. D Narayana this June.
Kerala had initially welcomed the GST system, believing it would benefit client states. However, the committee assessed that producer states continue to profit from this. The unavailability of IGST-related data to states is hindering the resolution of the problem.
Kerala had formed a committee to study this issue and demanded information on intrastate trade in the GST Council. The Finance Department informed that the last GST council decided to hand over the information.
Growth Rate of Debts Higher than That of Revenue
The committee observed that from 2011-12 to 2019-20, Kerala’s debt growth rate was higher than the growth rate of domestic income. The debt growth over these ten years was 14.53 percent, while the economy grew at a rate of 9.26 percent.
The five-year debt-to-domestic-income ratio from 2011-12 to 2015-16 rose from 24.56 percent to 28 percent. The Finance Commission had fixed it at 25 percent. In 2018-19, when Kerala suffered due to massive floods, the rate increased to 31.58 percent.
Kerala #IGSTLoss #StateFiscalReviewCommittee #GSTCouncil #TaxLoss #FinanceDepartment #DebtGrowth #EconomicReport #GSTSystem #IntrastateTrade
