Kerala expects annual revenue loss of ₹8,000–10,000 crore due to GST rate cuts, Finance Minister K N Balagopal said
Revenue loss of about ₹2,500 crore estimated from cement, electronics, auto and insurance sectors
State supports GST rate cuts but wants benefits passed on to common people
Kerala is expected to see an annual revenue loss of ₹8,000 crore to ₹10,000 crore due to Goods and Services Tax (GST) rate cuts, state Finance Minister K N Balagopal said on Thursday.
While making it clear that the state supports the GST rate cuts that will reduce prices, the minister said the central government should ensure that the rate cut benefits are passed on to the common people.
On Wednesday, the GST Council approved a two-rate structure -- 5 and 18% -- from the current four slabs -- 5, 12, 18 and 28%.
At a media briefing in the national capital, Balagopal said compensation should be provided for states but the issue was not taken seriously during the GST Council meeting.
The state is expected to see an annual revenue loss of ₹8,000 crore to ₹10,000 crore due to the GST rate cuts, he said.
According to Balagopal, the annual revenue loss from four sectors -- cement, electronics, auto and insurance -- is estimated at ₹2,500 crore.
Almost all personal-use items and aspirational goods for the middle class, like AC and washing machines, will see rate cuts.
Premium paid for individual life insurance and health insurance (including family floater), policies, too, have been exempted from GST.
On Wednesday, Union Finance Minister Nirmala Sitharaman said all decisions at the GST Council were taken unanimously, with no disagreement with any state.
The financial implication of the rate rationalisation would be ₹48,000 crore and this would be "fiscally sustainable for Centre and state", Revenue Secretary Arvind Shrivastava said on Wednesday.
