Thiruvananthapuram, 5th September 2025: In a surprising statement following the GST Council meeting in Delhi on Wednesday, the Finance Minister of Kerala, K N Balagopal, expressed his concern over the potential lack of consumer benefits from the recent Goods and Services Tax (GST) rate cuts.
Balagopal’s assertion came as he highlighted that while many states, including Kerala, supported the rationalisation of GST rates, there was no guarantee that companies would pass on the savings to consumers. He cited past instances where prices had actually increased despite rate reductions.
Recognizing the need for protection mechanisms from the Centre, Balagopal emphasized that states, particularly Kerala, required compensatory measures for potential revenue losses due to the GST rate rationalisation. The Finance Minister appealed for immediate action to ensure a balance between consumer interests and state revenues.
The GST Council, which is responsible for setting tax rates and rules on India’s goods and services tax, had agreed upon a series of GST rate reductions in the meeting, aiming to stimulate economic growth and alleviate the burden on consumers. However, concerns have been raised about the possibility of these benefits not being passed on to consumers, as suggested by Balagopal.
The Finance Minister’s comments were made against the backdrop of Kerala’s ongoing political and economic challenges. In recent months, Kerala has faced fiscal pressures due to its substantial revenue dependency on goods and services tax collections.
Stakeholders will be closely watching developments regarding the implementation of these GST rate reductions, with the hope that they will indeed benefit consumers as intended and that compensatory measures will be taken for states to mitigate potential revenue losses.
