Archive · 22 Aug 2025
States Demand GST Revenue Loss Compensation Plan
The government is changing the GST tax system, potentially lowering rates on some items.
States, especially those ruled by the opposition, are worried about losing money from these changes.
They want the government to explain how they will be compensated for any financial loss.
One state suggests the government should figure out how much money will be lost and provide a plan to make up for it.
Experts predict a large loss in tax revenue, and some states fear this could hurt important services.
Opposition states want the Centre to clarify how revenue losses from GST rate changes will be addressed.
Bengal's finance minister argues that the Centre must calculate and compensate for potential revenue loss.
Rate rationalisation could impact 400-450 items.
SBI Research estimates annual loss could be between ₹60,000 crore and ₹1.1 lakh crore.
Bengal also suggests amending GST Act to maintain tax incidence on demerit goods.
- Who
- Opposition-ruled states, the Centre, and the Group of Ministers (GoM).
- What
- Demand for clarity on compensation for potential revenue losses from GST rate rationalisation.
- When
- Following a GoM meeting.
- Where
- Delhi
- Why
- To protect states' revenues following GST rate changes.
Centre
Opposition States
Tax Rates
Centre
Implement GST rate rationalisation.
Opposition States
Ensure state revenues are protected.
- Topic
- GST Rate Rationalisation
- States Demanding Clarification
- Bengal, Telangana
- Concern
- Revenue Loss Compensation
- Estimated Revenue Loss
- ₹60,000 crore to ₹1.1 lakh crore (SBI Research)
- Next Step
- GST Council deliberation next month.
Sources
GST exemption on health, life insurance policies must benefit end-users: Bhatti
GST reforms: SBI Life, HDFC Life to LIC - Insurance stocks rally on reports of GoM proposal to exempt taxes on premiums
GoM on rate rationalisation meets to discuss Centre's GST rate cut proposal
GoM on rate rationalisation meets to discuss Centres GST rate cut proposal
Big Relief Likely For Policyholders, GST On Life & Health Insurance Premiums May Soon Be Removed
GST Rate Rationalisation: GoM Accepts Elimination of 12% and 28% Brackets
GoM accepts 2-slab GST structure proposal, final decision with Council meet next month
Insurance Stocks Rally on GST Exemption for Health, Life Insurance Products
Bhatti At GST Meeting: GST Rationalisation Should Not Hit States' Revenues
Thenarasu Wants Protection For Tamil Nadu Revenue
GST 2.0 Reforms: GoM panel greenlights Centre's Two-slab plan
Bhatti demands safeguards to south states in GST rejig
