Kerala Seeks Revenue Protection, Warns GST Rate Rejig May Cut Rs.8k–10k Cr
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 Rs.8,000 crore to Rs.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 Rs.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.
