September 5, 2025

Get ready for a big shake-up in your pocket! Kerala’s Finance Minister K N Balagopal spilled the beans on Thursday, saying the state is bracing for a huge revenue loss — between Rs 8,000 crore and Rs 10,000 crore every year. Why? Because of the recent GST rate cuts approved by the GST Council, which came as a big surprise with a sharp two-rate system of just 5% and 18%, down from the earlier four slabs (5%, 12%, 18%, and 28%). The new rates kick in from September 22 and promise to bring more affordable prices on loads of goods. At a bustling media briefing in Delhi, Balagopal, a key leader from the Left Democratic Front, said, “The state supports the GST rate cuts that will reduce prices but the central government should ensure that the rate cut benefits are passed on to the common man.” Sounds fair, right? But hold on! The minister also raised a red flag — companies might jack up prices before dropping them to match the lower GST rates, playing a sneaky game. Kerala is particularly hit hard because its people spend more on items taxed at higher rates like cement, electronics, autos, and insurance. Balagopal shared that these four sectors alone could cost the state Rs 2,500 crore yearly. And guess what? The full picture of how this impacts both the state and Centre is still foggy. The minister warned, “Despite assurances that GST would lead to economic buoyancy and increased consumption, thereby boosting revenues, such buoyancy has not materialised even after eight years of implementation.” Not stopping there, Balagopal appealed to keep the GST on Kerala's famous paper lottery at 28% instead of hiking it to 40% like the latest plan suggests — this is crucial as lottery sales are a big earner for the state. He argued for letting states decide rates on paper lotteries and keep all the money, a spicy demand! Also, the minister pushed for raising the revenue share states get from GST collections from the current 50% to 60%, aiming to ease their financial pain. Meanwhile, Union Revenue Secretary Arvind Shrivastava said the overall financial impact would be Rs 48,000 crore but called it “fiscally sustainable” for both Centre and states. On a positive note, some gems got a GST break: premium payments on individual life and health insurance policies are now exempted from GST. But Balagopal isn’t sure if the common people will actually feel the benefits. In a nutshell, Kerala’s boss of finances is sounding the alarm — while GST cuts may give us cheaper goods, the state’s pocket is getting pinched badly. Let’s watch closely if the Centre and companies play fair and if Kerala’s demands find a friendly ear at the GST Council. After all, who wants to pay more but get less in return? Union Finance Minister Nirmala Sitharaman insisted on Wednesday that all GST Council decisions were made in unity, with no state opposition. But as Balagopal’s fiery case shows, the drama is far from over!

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Tags: Kerala, Gst rate cuts, Revenue loss, Finance minister k n balagopal, Gst council, Tax rate structure,