Centre plans to take away more financial powers of States: Kerala Minister

Madurai After limiting financial powers of the State governments with GST, the Centre was trying to

After limiting financial powers of the State governments with GST, the Centre was trying to take away their revenue collection through registration and lesser devolution of funds to the States, said Kerala State Finance Minister K.N. Balagopal.

“If the attack on State ... by taking away their taxes ... continued, the reduced tax collection would adversely impact the education, health and transport,” he said.

Addressing a meeting organised by Communist Party of India (Marxist) here on Tuesday, Mr. Balagopal said that State can increase its taxes only with respect to fuel and liquor. "Otherwise, (post-GST) State Finance Ministers have been reduced to cashiers disbursing money," he said.

Under the 15th Finance Commission’s devolution formula, the Centre which spends lesser funds gets the lion’s share of the total GST collection. “State Governments that need to spend more than 60% of their taxes are getting only 37% of the GST,” he said.

Now, the Centre was planning to take away more financial powers of the States through Motor Vehicle registration and land registration by way of one nation, one registration. Every State will lose heavily on this account.

Mr. Balagopal charged that the Centre, which implemented GST by convincing the States that it would compensate the tax downfall, was going back on its promise. For July, no GST compensation will be given to States.

Besides, the Centre was not sharing a chunk of the tax collected in the name of surcharge and cess. "Surcharge and cess should be imposed during emergency times and its rate should be very less. But, that is not the case now," he added.