Kochi: The Kerala Assembly on Wednesday passed a resolution demanding comprehensive reforms in the implementation of the Goods and Services Tax (GST) system in India. The move comes in response to the state’s concerns over the current structure of GST, which it claims is unfavorable to Kerala’s economy.
The resolution, presented by the Finance Minister, highlights the need for greater autonomy for states in determining tax rates and addressing the revenue shortfall faced by Kerala. The state government argues that the current GST structure disproportionately affects the revenue generation capacity of Kerala, which heavily relies on services and has a relatively small manufacturing sector.
According to recent data from the Central Board of Indirect Taxes and Customs, Kerala’s GST revenue collection for the financial year 2022-23 amounted to ₹58,300 crores, registering a growth of 8% compared to the previous year. However, this growth rate is significantly lower than the national average of 12%, indicating the state’s struggle to keep up with the pace of economic growth.
The resolution also emphasizes the need for a mechanism to address the compensation cess shortfall faced by the state. Kerala argues that it has been receiving inadequate compensation for the loss of revenue due to the implementation of GST, leading to a strain on its finances. The state government is seeking the central government’s intervention to resolve this issue and provide the necessary financial support.
Furthermore, the resolution calls for a reevaluation of the tax rates on essential commodities, including petroleum products and natural gas. Kerala believes that high tax rates on these items have contributed to rising inflation and increased the burden on consumers, especially during times of economic hardship.
The state government has proposed a series of reforms, including the introduction of a separate rate for services, rationalization of tax rates, and simplification of compliance procedures. It emphasizes the importance of addressing the concerns of the states to ensure a more balanced and equitable GST system that promotes economic growth and supports the development aspirations of all regions.
The resolution passed by the Kerala Assembly sends a strong message to the central government, urging them to take immediate action to address the concerns raised by the state. It highlights the need for a collaborative approach between the center and the states to create a GST framework that caters to the specific needs and challenges of each state, while ensuring a harmonious and unified tax system for the entire country.
In conclusion, the resolution passed by the Kerala Assembly reflects the growing discontent among states regarding the current implementation of GST in India. It underscores the urgency for comprehensive reforms to make the system more responsive to the diverse economic realities and revenue requirements of individual states. The central government must now carefully consider the concerns raised by Kerala and other states to pave the way for a more effective and inclusive GST framework that benefits all stakeholders involved.
