Tax Turmoil: Karnataka CM Claims ₹15,000 Crore Loss Due to Central GST Rate Cuts
Massive Annual Revenue Loss
Chief Minister Siddaramaiah revealed that the Central Government’s decision to rationalize and reduce Goods and Services Tax (GST) rates could cost the state of Karnataka an estimated ₹15,000 crore annually. While acknowledging the inability to oppose the rationalization, he stated the state will suffer the financial loss.
Political Motivation and Central Bias Allegations
The Chief Minister described the GST rate revisions as “politically motivated,” suggesting they were made with an eye on the upcoming elections in Bihar. He also heavily criticized the Centre for its perceived financial bias, stating that while Karnataka contributes ₹4.5 lakh crore in taxes to the central pool annually, it only receives about 14% in return, compared to states like Uttar Pradesh which receive a higher percentage of grants.
Denial of Finance Commission Grants
Siddaramaiah accused the Centre of intentionally denying grants recommended by the 15th Finance Commission, specifically mentioning ₹4,590 crore recommended for Karnataka that has not been paid. He further cited the denial of funds for major state projects, including ₹3,000 crore for lake rejuvenation and ₹5,400 crore for the Upper Bhadra scheme, stating the state is due to receive a total of ₹11,490 crore in unreleased funds. He concluded by saying the state government will approach the courts if necessary to secure its rightful share of central funds.
Source :- Times of India