Thu Sep 04 10:47:35 UTC 2025: **Summary:**

Kerala’s Finance Minister K.N. Balagopal voiced strong concerns at the recent GST Council meeting regarding potential revenue losses for states due to GST restructuring. Kerala anticipates a significant annual revenue drop (₹8,000-₹10,000 crore). Balagopal emphasized that while both the Centre and states face revenue reductions, states are more vulnerable as they heavily rely on GST revenue. He requested continued revenue protection for states. Kerala also proposed a revised revenue-sharing ratio (60:40 in favor of states), monitoring to ensure GST rate cuts benefit consumers, and opposed raising the tax on paper lotteries, citing the livelihood impact. Balagopal highlighted that Kerala’s revenue under GST is significantly lower than it would have been under the pre-GST tax system.

**News Article:**

**Kerala Raises Alarm Over GST Revenue Losses at Council Meeting**

**THIRUVANANTHAPURAM, September 4, 2025** – Kerala has voiced strong opposition to the proposed restructuring of the Goods and Services Tax (GST) framework, citing potentially devastating revenue losses for the state. Speaking after the 56th GST Council meeting in New Delhi, Kerala Finance Minister K.N. Balagopal expressed deep concern that the revamp could lead to a ₹8,000 crore to ₹10,000 crore dip in the state’s annual revenues.

“While tax rejig for automobiles, insurance, electronics and cement alone would bring down Kerala’s revenue by ₹2,500 crore,” Balagopal warned, emphasizing the disproportionate impact on states compared to the Centre, which has alternative income streams. He advocated for continued revenue protection for states, a proposal he claims was largely ignored by the council.

Kerala is also pushing for a revised revenue-sharing ratio of 60:40 in favor of states and stricter monitoring to ensure consumers benefit from GST rate cuts. Additionally, the state strongly objects to the proposed increase in the tax on paper lotteries, which it argues will jeopardize the livelihoods of over two lakh people.

Balagopal illustrated the gravity of the situation by pointing out that Kerala’s GST revenue is significantly lower than what it would have been under the previous Sales Tax and VAT regime. He stated that if the pre-GST tax regime were still in force, Kerala’s revenue would have touched ₹60,000 crore last year at 15% to 16% annual increase. Instead, the State received only ₹32,773 crore under the GST.

“We have registered our protest,” Balagopal stated, asserting that Kerala is advocating for the financial well-being of all states reliant on GST revenue. 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.

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