Kerala has strongly reiterated its demand at the just-concluded GST council meeting that the revenues of the States be protected under the revamped Goods and Services Tax (GST) structure, Kerala Finance Minister K.N. Balagopal said on Thursday (September 4, 2025).Speaking to the media after the 56th GST council meeting in New Delhi, Mr. Balagopal said Kerala alone is likely to face a dip in annual revenues to the tune of ₹8,000 crore to ₹10,000 crore on account of the revamp. “This is an approximate figure. The tax rejig for automobiles, insurance, electronics and cement alone would bring down Kerala’s revenue by ₹2,500 crore for Kerala,” he said.Both the Centre and the States would see reduction in tax revenues, but the Centre has other income sources, while the States have only the GST. So the protected revenue should be in place for some more years at least, Mr. Balagopal said.Registers protest“The Centre has not been prepared to discuss this matter. The GST council also failed to pay serious attention to it. That they have failed to pay any heed is unfortunate. We have registered our protest,” he said, adding that Kerala was speaking for all the States. On the need for revenue protection, the Kerala Finance Minister said any dip in revenues would badly affect Kerala since it spends a major portion of its revenues on salaries and pensions and welfare measures such as social security pensions.Kerala has also demanded that the revenue sharing ratio between the States and the Centre be revised to 60:40 in favour of the States.Secondly, Kerala has pressed for measures to ensure that the benefits of the rate cuts genuinely benefit the common people, who are the end-consumers, Mr. Balagopal said. The State GST department and Consumers Affairs department would closely monitor the developments to see whether the consumers really benefit from the GST council’s decision, he said.“While the rate rationalisation is good for the public, there should be a guarantee that the end consumer benefits from it. Some assessments say that the rationalisation would bring down taxes to the tune of ₹2 lakh crore. The people should benefit from it,” he said.Past experience has shown that companies would work around such measures by raising the prices of commodities. While cement prices should come down by ₹30 to ₹35 due to the revamp, already cement companies are planning to hike prices, he pointed out.Tax on lotteryKerala has also raised strong objections to the decision to raise the tax on paper lottery to 40%, Mr. Balagopal said. The State’s demand was that the tax on lottery tickets should be retained at 28%. “We pointed out that the livelihood of more than 2 lakh people depend on this sector,” he said.Mr. Balagopal pointed out if the pre-GST tax regime (Sales Tax, VAT) were still in force, Kerala’s revenue would have touched ₹60,000 crore last year at 15% to 16% annual increase. Even at a 12% annual increase, the revenue would have risen to ₹51,892 crore in 2024-25. Instead, the State received only ₹32,773 crore under the GST, he said.Published - September 04, 2025 04:17 pm IST