Siddaramaiah Backs GST Cut, Seeks Centre’s Help on Revenue Loss

Karnataka Chief Minister Siddaramaiah endorsed the GST Council’s decision to rationalise GST rates, describing it as a vital step to alleviate the financial and compliance burden on citizens and businesses. However, he cautioned that the move could result in a significant revenue loss of Rs 15,000-20,000 crore for Karnataka, urging the Central government to devolve the compensation cess collected on certain sin goods back to the states to offset the impact.

In a strongly worded statement, Siddaramaiah criticized the Modi government for ignoring warnings about the GST’s adverse effects since its “hurried” rollout in 2016-17. He credited Congress leader Rahul Gandhi and opposition-ruled states for consistently advocating for reforms, which he claimed were delayed for eight years due to the Centre’s resistance. “This ‘Gabbar Singh Tax’ crushed small businesses, increased compliance costs, and burdened families,” he said, noting that the GST voting structure—where the Centre holds one-third of the votes and states share two-thirds—allowed the Modi government to block reforms despite state consensus.

Siddaramaiah emphasized that the benefits of rate rationalisation must reach consumers, not merely boost corporate profits, and held the Union government and the Central Board of Indirect Taxes and Customs (CBIC) accountable for ensuring this. “If the benefits fail to reach the common man, the blame will rest squarely on the union government,” he warned.

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Despite the potential revenue shortfall, Siddaramaiah reaffirmed Karnataka’s commitment to the welfare of its people, prioritizing economic policies that enhance purchasing power, broaden the tax base, and promote prosperity. “For us, governance is not about optics; it is about empowering every citizen,” he stated, positioning the state as a champion of equitable economic growth while pressing the Centre for fair compensation to mitigate the fiscal impact of the GST reforms.

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