IGST Panel Finalizes Action Plan to Resolve 'Negative Balance' Issue

The Indian government has initiated a comprehensive review of the IGST (Integrated Goods and Services Tax) settlement mechanism following complaints from states like Tamil Nadu and Kerala about shortfalls in revenue allocations. A committee, composed of both central and state officials, has been formed to address the "negative balance" in IGST transfers, where certain states have received more or less than their entitled share. The action plan includes analyzing the discrepancies and identifying the amounts owed or to be recovered. The committee is expected to present a final report to the GST Council by October 30, 2024. States with significant revenue losses, such as Kerala, estimate a loss of Rs 35,000 crore since GST's implementation. This move aims to ensure fair distribution among all states and rectify the imbalances.