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In his letter, Balagopal cited a communication from the Under Secretary, State Taxes Division, Central Department of Revenue, to the Central Accounting Authority of the GST, stating that an amount of approximately Rs 332 crore was deducted towards ‘adjustment of advance apportionment to make up the shortfall in IGST balance.’
Union Finance Minister Nirmala Sitharaman
Following reports that the Central government has decided to deduct Rs 332 crore from the settlement of Integrated Goods and Services Tax (IGST) for November 2023 to Kerala, state Finance Minister KN Balagopal has on Saturday written to Union Finance Minister Nirmala Sitharaman, urging her to reverse the decision.
In his letter, Balagopal cited a communication from the Under Secretary, State Taxes Division, Central Department of Revenue, to the Central Accounting Authority of the GST, stating that an amount of approximately Rs 332 crore was deducted towards ‘adjustment of advance apportionment to make up the shortfall in IGST balance.’
Balagopal, in his letter, pointed out that this cut in the IGST settlement will further deteriorate the fiscal situation of the state.
“The deduction is a substantial chunk of the state revenue and adversely affects the fiscal situation in the state,” he said in the letter.
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Complaining of a lack of clarity in the deduction and the calculations that have led to it, the state Finance Minister has urged the Centre to explain the rationale behind the decision.
“The ratio in which ad hoc settlements were made in each of the previous occasions of ad hoc settlements, 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,” said Balagopal.
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