Karnataka CM demands revenue safeguards ahead of GST rate rationalisation talks
GST
Dated:- 29-8-2025
PTI
Bengaluru, Aug 29 (PTI) Karnataka Chief Minister Siddaramaiah on Friday called for the Centre's proposed GST rate rationalisation to be backed by a robust revenue protection framework for states, ahead of the GST Council meeting next week.
He said the rationalisation process should not compromise state finances and sought the inclusion of three safeguards in the reform.
“The rationalisation of GST rates must be supported by a robust revenue protection framework for states, a supplementary levy on sin and luxury goods, and a guaranteed compensation mechanism for at least five years,” Siddaramaiah said in a statement here.
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the common man.
Siddaramaiah welcomed the consensus draft prepared by opposition-ruled states at the meeting, which will be placed before the GST Council, chaired by the Union Finance Minister and comprising all state ministers, at its September 3-4 session.
“This draft seeks to ensure reforms that are both fair and sustainable,” he said.
“We are for rationalisation of GST rates, easing compliance and reducing the burden on the people. But such reforms must be accompanied by a robust framework that protects the fiscal interests of the states. Without this, states will find it difficult to sustain welfare and development programmes, leading to a serious weakening of their financial autonomy,” Siddaramaiah said.
He noted that opposition
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ively, and engage with states in good faith in the true spirit of cooperative federalism.” Siddaramaiah claimed that Karnataka has already faced discrimination in fund devolution from the union government, “suffering an annual shortfall of nearly Rs 25,000 crore.” “Any further erosion of GST revenues will only compound this injustice and directly affect our capacity to deliver on the promises of development and welfare,” he claimed.
The Centre has proposed a two-tier GST structure of 5 and 18 per cent, replacing the current four-slab system of 5, 12, 18, and 28 per cent, plus a compensation cess.
Under the proposal, goods and services would be classified as merit and standard and taxed at 5 and 18 per cent.
A 40 per cent slab has been
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