Thiruvananthapuram: Kerala Chief Minister Pinarayi Vijayan on Tuesday said that the State Government will not implement the five percent hike in GST for essential goods such as rice and pulse items sold in packets by small-time producers and retail traders, including Kudumbashree units.
The CM said that the State has sent a letter to the Prime Minister seeking withdrawal of the hike in GST for packed items that would lead to price rise for essential items. He claimed that his government was against all types of increase in tax that would affect the common man.
The government’s stand was that the Centre should hike tax on luxury goods instead of resorting to raising tax for essential commodities, he added.
The CM further said that such a stand was conveyed by Kerala at the meetings of the GST Council and various government committees on GST rates.
Earlier, Finance Minister KN Balagopal had told the State Assembly that the State Government would not implement the five percent hike in GST rates for essential commodities.
Kerala implements Centre’s dictum on July 18
But the Kerala Government was likely not serious about its publicised opposition to the latest round of hike in Goods and Services Tax (GST) on a few essential articles from July 18. The State implemented the latest Central government order to impose five percent GST even as the Chief Minister and Finance Minister asserted that the State would not do so.
(Under the GST regime both the Central and the State governments have to agree on combining their levies with an appropriate proportion for revenue sharing between them.)
A hike for packed items such as rice, wheat and pulses being sold through retail shops came into force on July 18. The Centre and the State will share the 5% additional revenue generated out of this tax hike.
The Central government issued a notification on 2.5% GST hike for essential goods. Had it been sincere on the non-implementation of such an increase, the Kerala Government could have issued a notification exempting the same hike that it could impose. Instead of doing it, Kerala implemented the Union government’s order in the same manner in the State from July 18.
To impress the public that the Left Democratic Front Government is against the hike in GST for essential goods a letter was sent to the Central Government, requesting its withdrawal.
(GST is a single domestic indirect tax law for the entire country. It subsumes erstwhile state taxes like VAT, octroi, luxury tax, purchase tax, and central taxes like customs duty, central excise duty and service tax.)
TL;DR
Kerala Chief Minister Pinarayi Vijayan announced that the state will not implement a five percent GST hike on essential goods but has done so despite claiming opposition. The government has requested the Central government to withdraw the hike to prevent price increases for essential items.
- The Kerala government is against tax increases that affect the common man and has communicated this stance at GST Council meetings. The five percent GST hike on packed essential goods was implemented on July 18 despite the state's public opposition. Kerala's request to the Central government for withdrawal of the hike appears to be more of a public relations effort than a genuine policy change.
- Thiruvananthapuram: Kerala Chief Minister Pinarayi Vijayan on Tuesday said that the State Government will not implement the five percent hike in GST for essential goods such as rice and pulse items sold in packets by small-time producers and retail traders, including Kudumbashree units.
- The CM said that the State has sent a letter to the Prime Minister seeking withdrawal of the hike in GST for packed items that would lead to price rise for essential items.
Chief Minister Pinarayi Vijayan opposed the five percent GST hike on essential goods because he believes it would lead to a price rise for items like rice and pulses, negatively impacting the common man. He emphasized that the government is against any tax increases that affect essential commodities.
The Kerala government sent a letter to the Prime Minister requesting the withdrawal of the GST hike on packed essential items, asserting their opposition to the tax increase. Despite this, the state implemented the hike as mandated by the Central government starting July 18.
The GST system in India requires both the Central and State governments to agree on tax rates, which are then combined for revenue sharing. This collaboration is essential for the effective implementation of the GST regime across the country.
The Kerala government advocated for an increase in taxes on luxury goods instead of raising taxes on essential commodities, arguing that the latter disproportionately affects lower-income individuals and families.
The GST Council meetings are significant as they provide a platform for state and central governments to discuss and decide on GST rates and policies, influencing how tax laws are applied across India. Kerala's participation highlights its stance on protecting essential goods from tax hikes.