Kerala Chief Minister Pinarayi Vijayan urged the Centre to extend the Goods and Service Tax (GST) compensation provided to states for five more years.
In a letter sent to Prime Minister Narendra Modi on Thursday, Pinarayi pointed out that the GST system was taking more time than expected to get stabilised. The Covid-19 pandemic and related restrictions had also caused a slowdown in the economy.
The five-year period of GST compensation ended in June 2022.
According to the chief minister, the compensation was essential for the states in view of the fall in revenue during the GST system. The 15th Finance Commission report also pointed out the fall of share of tax revenue to the states. States such as Kerala were also finding it difficult to go for open market borrowing, owing to the conditions imposed, Pinarayi said.
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