Karnataka CM Siddaramaiah.
Credit: PTI File Photo
Chief Minister Siddaramaiah on Friday shot off a letter to Finance Minister Nirmala Sitharaman expressing concerns and seeking clarification on Rs 798 crore from the Integrated Goods & Services Tax (IGST) being deducted from Karnataka.
“The information at our disposal indicates that an amount of Rs 798.03 crore has been adjusted out of the IGST settlement as ‘adjustment of advance apportionment to make up shortfall in IGST balance as on 26.12.2022’,” Siddaramaiah stated.
Siddaramaiah asked Sitharaman to explain the “rationale” behind “huge negative balances of Rs 34,000 crore to accumulate”. He said the accumulation of negative IGST balances would impact treasury management of state finances.
“In order to facilitate better understanding and transparency, the state of Karnataka seeks information on the total amount of negative IGST balance and the methodology employed for distributing this among the states for recovery,” Siddaramaiah stated.
Siddaramaiah also asked the union government to make deductions in instalments. “Given the pressing need for resources and the potential challenges associated with lump-sum deductions...we propose a phased approach, preferably in ten instalments, to mitigate the immediate impact on state finances,” he stated.
“We believe that a transparent and collaborative approach in addressing these concerns will contribute to the effective functioning of the financial ecosystem,” Siddaramaiah stated.