IGST settlement has remained a problematic matter, with the Opposition Congress-led United Democratic Front criticising the Left Democratic Front government for alleged lapses in claiming Kerala’s eligible share. | Photo Credit: REUTERS
Kerala has recorded a 7.07% increase in its integrated goods and services tax (IGST) revenue component in 2023-24 over the previous fiscal, show Finance department data.
Kerala received ₹16,976.64 crore in 2023-24, as against ₹15,855.33 crore under the regular IGST settlement in 2022-23.
Besides the regular settlement, Kerala also received ₹1,028.23 crore by way of ad hoc settlement in 2022-23. Provisional/advance settlement is made on an ad hoc basis for the unapportioned IGST amount from time to time. For the current fiscal, Kerala has received ₹2,881.64 crore up to May under the regular settlement, provisional figures show.
Problematic matter
IGST settlement has remained a problematic matter, with the Opposition Congress-led United Democratic Front (UDF) criticising the Left Democratic Front (LDF) government for alleged lapses in claiming the State’s eligible share. Levied on interstate supply of goods and services, IGST is collected by the Centre. The accounts are settled periodically and the revenue is shared between the Centre and the States.
In July, the Kerala Public Expenditure Review Committee had advised the State government to keep a closer watch on IGST inflow, observing that the present system results in revenue loss for Kerala.
‘Gross loss’
The committee also pegged the “gross loss” to Kerala in IGST revenues since the GST roll-out in July 1, 2017, in the range of ₹20,000 crore to ₹25,000 crore. It further noted a lack of ‘detailed and disaggregated data’ on the IGST clearing mechanism which prevents Kerala from properly monitoring the tax revenue.
The State government had constituted an IGST task force in May 2023 as part of the overall measures for improving overall GST collection. In July, Finance Minister K.N. Balagopal had informed the State Assembly that Kerala has urged the GST Council to examine whether proper apportioning of IGST is occurring on the basis of the place of supply.
From 2021-22, Kerala has been recording an increase in goods and services tax (GST) revenues, after registering dips in 2019-20 and 2020-21 over the previous fiscals. In 2021-22, the revenue stood at ₹23,985.29 crore, an increase of ₹4,708.76 crore over the previous fiscal. In 2022-23, GST revenues rose by ₹5,210.01 crore (₹29,195.30 crore total) and in 2023-24, by ₹1,749.18 crore (₹30,944.48 crore total).
In the first quarter of the current fiscal (April-June), the State reported ₹8,189.87 crore revenue.
