CM Fears GST Rationalisation Could Cost Karnataka Rs 20,000 Crore in Revenue
CM urges Centre to share cess with states, warns benefits must reach people, not boost corporate profits
Bengaluru: Though Chief Minister Siddaramaiah on Friday welcomed the GST Council to rationalise Goods and Services Tax (GST) rates, an important step to reduce both the monetary and compliance burden on people and businesses, but expressed fears over Karnataka losing Rs 15,000 crore to Rs 20,000 crore in revenue.
However, the Chief Minister stated, “Yet, keeping the welfare of our people above everything else, we welcome it” and asked the Union Government “to devolve the GST compensation cess, still being collected on certain sin goods (pan masala, tobacco, aerated drinks, gutka, cigarettes, caffeinated beverages among others), back to the States.”
In a statement here, Siddaramaiah, holding the finance portfolio, stated “Now, the responsibility is on the Union Government and the Central Board of Indirect Taxes and Customs (CBIC) to ensure that the benefits of GST rationalization actually reach the consumer.”
Continuing, he said, “The reduction in rates must lower prices for the people, not increase profit margin for big companies. If the benefits fail to reach the common man, the blame will rest squarely on the Bharatiya Janata Party led Union Government.”
“This GST rationalization decision of the Union Government is not new wisdom but a long-delayed acceptance of what Congress leader and Leader of Opposition Rahul Gandhi and opposition-ruled States have demanded since 2016-17,” said the Chief Minister.
Siddaramaiah said, “We had warned the Union Government over the hurriedly rolled out GST in the country would crush small businesses, increase compliance costs and burden ordinary families. But, Prime Minister Narendra Modi chose to ignore these warnings for eight long years.”
“Today’s course correction proves that our stand was right all along. The people of the country could have been spared years of hardship had the Union Government lent a patient hearing to the Opposition parties warnings,” the Chief Minister said in the statement.
