Image Credit: X account @siddaramaiah
Karnataka Seeks Compensation Over Two-Slab GST Losses
Karnataka Chief Minister Siddaramaiah has warned that the Centre’s proposed shift to a two-slab Goods and Services Tax (GST) structure of 5% and 18% could lead to a revenue loss of nearly ₹15,000 crore annually for the state. While he expressed support for rationalisation of the tax regime, he insisted that reforms must not come at the cost of state finances.
Forum for Representation
Revenue Minister Krishna Byre Gowda, representing Karnataka at the GST Council, will raise the state’s objections at the upcoming council meeting scheduled for September 3–4. He said Karnataka is prepared to oppose the move unless the Centre commits to a clear compensation plan that protects states from heavy fiscal losses.
Wider State-Level Impact
Several other states, including Kerala, Tamil Nadu, and West Bengal, have also raised alarms over potential losses under the new system. Projections suggest that states collectively could face revenue declines ranging between ₹85,000 crore and ₹2 lakh crore. Experts estimate the shortfall may fall within ₹60,000 crore to ₹1.1 lakh crore, depending on consumption patterns and tax distribution under the new slabs.
