GST systematically flawed, there is lot of tax leakage: Kerala FM

Thiruvananthapuram: Kerala Finance Minister K N Balagopal has sought systemic changes in the GST structure, saying every state and consumer has lost because of its basically flawed architecture that has also led to rampant revenue leakage for the states.
The Goods and Services Tax (GST) regime came into force in July 2017. Even though the framework is focused on having a one-nation-one-tax model, quite a few items, including petroleum products and liquor are still out of the GST purview.
“The four years of the Goods and Services Tax (GST) regime has led to a steep 61 per cent plunge in our own tax revenue, because both the structure as well as the design of GST are systemically flawed, creating enough room for leakages. And as far as I know, this is not just for Kerala but for all the states,” Balagopal told PTI during a recent interview in his Assembly chamber here.
Balagopal, who assumed office in May when the CPM government led by Pinarayi Vijayan returned to power, also said that Kerala’s total revenue has declined by a third after the GST was rolled out and called for some radical changes in the four-year-old tax regime, but did not elaborate on the changes required.
As a Rajya Sabha member, Balagopal, in 2015, had opposed GST saying it would encroach upon the federal structure and also take away most of the powers of states, especially on the taxation front. He had also given a dissent note to the select committee that was then looking into the proposed GST framework.
Stating that his and the party’s ideological opposition to GST remains unchanged, Balagopal said, “We opposed it in principle even from the stage of the first draft bill”.
The Centre had claimed that goods traffic would be quick and without any barriers and consumers would benefit as prices would fall on lower taxes, but “let me tell you that sadly both are not met”, he pointed out.


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