New Delhi/Thiruvananthapuram, Sep 4 Kerala Finance Minister K.N. Balagopal on Thursday demanded that the benefits of the Goods and Services Tax (GST) reductions be passed on to ordinary citizens and not be monopolised by large companies.
The new announcements will come into effect later this month.
He issued a warning that the state government will closely monitor whether consumers actually gain from the recent tax cuts.
“The common people must see the benefit. Companies should not exploit the decision by raising prices. The government will intervene to ensure that the relief reaches those who need it most,” said Balagopal.
The minister expressed concern that the Centre did not address the issue of revenue loss for states when announcing the tax cuts.
Kerala estimates a loss of nearly Rs 4,500 crore in revenue, mainly from reductions on automobiles, cement, and other goods.
“The Centre has given no assurance on compensating states. This is not about making grand announcements like demonetization, it is about real impacts on state finances,” he remarked.
Balagopal also criticised the GST Council’s decision to raise the tax on lotteries from 28 per cent to 40 per cent, calling it a severe blow to the sector.
“Nearly two lakh people depend on lotteries for their livelihood. We expected relief when the matter came up before the GST Council. Instead, the decision has struck us like a blow to the head,” added the first-time legislator turned Finance Minister in the Kerala government.
The state has urged that decisions on lottery taxation be left to individual states, considering the unique dependence of Kerala’s economy on the sector.
A special meeting will soon be convened to discuss measures to mitigate the crisis facing the industry.
The minister further noted that the GST concessions should not disproportionately benefit big corporations.
“The state government will ensure that the relief does not go entirely into the pockets of large companies, while ordinary people are left out,” he said.
Balagopal also suggested that the speed with which the GST cuts were implemented hints at political motives, with upcoming elections possibly influencing the Centre’s decision. “The timing cannot be ignored,” he added.
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