States should get compensation for GST revenue loss; eco growth should benefit all: Kerala FM
New Delhi, Sep 14 (PTI): Kerala Finance Minister KN Balagopal on Sunday said GST rate rationalisation benefits should be passed on to the common people, but if there is no compensation for the annual revenue loss, then states will be unable to continue to meet their social responsibilities.
For Kerala, the annual revenue loss due to the GST rate rationalisation is estimated at Rs 8,000 crore to Rs 10,000 crore.
Asserting that economic growth should be beneficial for the entire country, Balagopal told PTI that progressive taxation should not mean less tax for all and high-income or high-end luxury goods should be taxed more, which is the general good taxation practice.
The Goods and Services Tax (GST) Council, which represents the Centre and the states, approved a two-rate GST structure -- 5 and 18 per cent -- on September 3. The revised rates, to be effective from September 22, will bring down the prices of a large number of items.
While Kerala has welcomed the rate rationalisation exercise, it is concerned about not having a compensation mechanism for the revenue loss.
Currently, there are four rate slabs -- 5, 12, 18 and 28 per cent.
In an interview with PTI in the national capital on Sunday, Balagopal stressed that if the GST rate rationalisation is not functioning with all the safeguards for the state, then the situation will be detrimental for the public finances in the future.
"GST rationalisation will result in huge discounts in taxes, and the prices should come down in the coming days. It should be passed on to the common consumers 'Aam Aadmi'... in the past, whenever rate rationalisation came (in 2017-18), the tax difference was not passed on to the people," the senior leader of the ruling CPI(M)-led Left Front in Kerala said.
GST, sales tax and Value Added Tax (VAT) are among the main revenue income sources for a state, while the Centre has a lot more options, the minister said and highlighted that if the revenue loss is not compensated, then states cannot continue with their social responsibilities like health, education and public distribution system.
According to Kerala-based Gulati Institute of Finance and Taxation, the state's annual revenue loss due to the GST rate rationalisation is estimated to be in the range of Rs 8,000 crore to Rs 10,000 crore, with the revenue loss related to goods alone pegged at around Rs 6,300 crore.
"The Indian economy is growing like anything. We are all happy about that... the growth should be beneficial for the entire country... those who are deserving should get it... Otherwise, a Laissez-faire economy and free market will not help the country to run," Balagopal said.
If the states are weakened without anything for welfare activities, then "what is the meaning of development we are boasting about?" the minister asked.
On September 3, Balagopal told the GST Council that the current rationalisation framework considers revenue neutrality at the national level, but consumption patterns differ widely across states.
"For Kerala, where the consumption basket is heavily skewed towards higher-rate items, the impact will be disproportionately severe compared to the national average," he had said.
As per the Kerala government, had the state's GST revenue continued to grow even at around 12 per cent from the protected revenue at the end of the compensation period, the revenue that would have accrued to the state would have been Rs 51,892 crore in 2024-25, whereas the GST revenue was just Rs 32,773 crore in the same financial year.
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Ordinance issued to increase number of Supreme Court judges from 34 to 38
New Delhi (PTI): The government has promulgated an ordinance to increase the strength of the Supreme Court from the present 34 judges to 38, including the Chief Justice of India.
The law ministry notified the ordinance on Saturday, which amended the Supreme Court (Number of Judges) Act, 1956, to increase the sanctioned strength of the top court.
So far, the sanctioned strength of the top court was 34, including the Chief Justice of India (CJI). Now, the number of judges has been increased by four, taking the sanctioned strength to 38.
The top court will now have 37 judges, other than the CJI.
With the apex court having two vacancies at present, and the ordinance coming into force immediately, the Supreme Court Collegium will now have to recommend six names for appointment as judges in the top court.
A bill will be brought in the Monsoon Session of Parliament to convert the ordinance – an executive order – into a law passed by Parliament.
The Union Cabinet had cleared a draft bill on May 5 to increase the number of apex court judges.
The strength of the Supreme Court was last increased from 30 to 33 (excluding the CJI) in 2019.
The Supreme Court (Number of Judges) Act, as originally enacted in 1956, put the maximum number of judges (excluding the CJI) at 10.
This number was increased to 13 by the Supreme Court (Number of Judges), Amendment Act, 1960, and to 17 by another amendment to the law.
The Supreme Court (Number of Judges) Amendment Act, 1986, augmented the strength of judges from 17 to 25, excluding the CJI.
A fresh amendment in 2009 further increased the strength from 25 to 30.
Article 124(3) of the Constitution lists the qualifications required to become a Supreme Court judge.
An Indian citizen who has either served as a high court judge for at least five years, or as an advocate for 10 years, or is a distinguished jurist, can be appointed to the top court.
The strength of the Supreme Court is increased based on the recommendations of the CJI, who writes to the Union law minister. After consulting the finance ministry, the Department of Justice under the law ministry moves the Cabinet with a draft bill.
