Kerala objects to Centre's call to deduct Rs 332 cr from IGST settlement

The Kerala government on Saturday raised an objection to a deduction of around Rs 332 crore from the settlement of Integrated Goods and Services Tax (IGST) for November 2023 to the state and said it will affect the fiscal situation in the southern state.

Addressing the media here, state Finance Minister K N Balagopal said it was not clear as to why this amount was deducted in this manner or what are the calculations underlying such deduction.

The senior Left leader also said that a letter in this regard was sent to Union Finance Minister Nirmala Sitharaman seeking her "urgent intervention".

He said an amount of approximately Rs 332 crore was deducted from the settlement of IGST towards "adjustment of advance apportionment to make up the shortfall in the IGST balance".

"This deduction is a substantial chunk of the state revenue and adversely affects the fiscal situation in the state," Balagopal said.

In the letter, the state finance minister said the calculations of settlements need to be discussed and deliberated in the council before being implemented so that a planned strategy can be chalked out for such recoupment.

"Kerala has been raising issues related to curtailment of its resources and releasing pending arrears from the Government of India. While the decision from the Government of India is pending to resolve requests, the cut in IGST settlement will further deteriorate the fiscal situation of the state," Balagopal said in the letter.