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Kerala requests 60% state share in GST, seeks fair IGST allocation

Kerala Finance Minister K N Balagopal proposed a revision of the GST tax sharing ratio, advocating for a 60 percent allocation to states instead of the current 50:50 split. In a statement issued after the GST Council meeting in New Delhi, he suggested this change would benefit states like Kerala significantly. He also emphasized that the decision to include destination state details in GSTR-8 returns would ensure Kerala receives its fair share of tax revenue from e-commerce operators.

During the meeting, it was decided that inter-state business-to-customer transactions above Rs 1 lakh must be detailed separately in GST returns, a reduction from the previous Rs 2.5 lakh threshold. Kerala had initially proposed a Rs 50,000 threshold. Balagopal highlighted that Kerala’s SGST growth rate is around ten percent, but IGST settlement growth is only three percent, attributing this discrepancy to flaws in the GST system. The council acknowledged Kerala’s concerns and agreed to review the IGST data to address the state’s revenue shortfall.

The GST Council also provided relief for traders who had received notices for late returns related to input tax credit. Traders can now settle their tax liabilities without facing interest or penalties for non-willful tax evasion up to 2021, reducing unnecessary legal proceedings. The Union Finance Minister instructed GST officials to review figures from July 2017 to identify and resolve revenue loss issues, ensuring a more accurate and fair distribution of tax revenues.


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