THIRUVANANTHAPURAM/PALAKKAD : Finance Minister K N Balagopal has written to his Central counterpart Nirmala Sitharaman to reverse the decision to deduct Rs 332 crore from the IGST settlement for Kerala. This was disclosed by the finance minister while speaking to mediapersons in Palakkad on Saturday.
In his letter, Balagopal cited a communication from the Under Secretary, State Taxes Division, Central Department of Revenue, to the Central Accounting Authority of GST stating that an amount of approximately Rs 332 crore was deducted towards ‘adjustment of advance apportionment to make up a shortfall in IGST balance’. The deduction is a substantial chunk of the state revenue and adversely affects the fiscal situation in the state, Balagopal said in the letter.
He also sought the details of the calculations done for finalising the amount. “Additionally, the ratio in which ad hoc settlements were made in each of the previous occasions, and the ratio in which these settlements are recouped from states may also be provided to throw light on the inter-state ratios adopted in these processes,” he said.
Balagopal opined that such recoupment, and the calculation of settlements need to be deliberated in the GST Council so that a planned strategy can be chalked out for the recoupment. He called for an in-depth evaluation of the current system of settlement, and the greater need for plugging leakages and strengthening the GST system.
The minister said that he had informed the Centre that the government expected an IGST of Rs 1,450 crore in November but it was unilaterally deducted. The IGST is the tax collected for the goods which arrive into the state which is settled on a monthly basis by the Centre. Balagopal said that the issue of cuts being made by the Centre in its allotment to the state and the need to settle the arrears due to the state have been raised before also. However, no decision has been taken on it. There were dues to the tune of Rs 57,000 crore outstanding from the Centre. The current deduction of Rs 332 crore will strain the financial position of the state adversely, the minister said.
He said that a sum of Rs 750 crore was due from the Centre for implementing the UGC scales in 2021. The Centre will reimburse the amount only after the amount is spent by the state. Though the director of technical education had presented the details to the Centre, the amount is still held back,” the minister added.