New Delhi: Kerala Finance Minister K N Balagopal on Thursday apprised the 16th Finance Commission of the state’s projected revenue shortfall following the GST rate rationalisation.

Last week, the GST Council approved a two-rate structure of 5% and 18%, effective from September 22. While supporting the move, Kerala has flagged concerns that it could cause an annual revenue loss of ₹8,000–10,000 crore and sought compensation.

Balagopal, who met Finance Commission Chairman Arvind Panagariya and members, submitted a supplementary memorandum detailing the potential impact. He said the state expects a hit of around ₹6,300 crore in goods revenue alone.

The minister also highlighted the adverse effect of the recent US tariff hikes, which could cost Kerala’s exports sector, particularly marine products and spices, nearly ₹2,500 crore.

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Kerala has long raised concerns over its declining share from the divisible pool, which fell to 1.92% during the 15th Finance Commission period from 3.87% under the 10th Commission. “Development should not be a negative thing… we (Kerala) need to get justice,” Balagopal said, expressing hope that the Commission would consider the submissions positively.

The 16th Finance Commission, which includes Annie George Mathew, Manoj Panda, T Rabi Sankar and Soumya Kanti Ghosh, is expected to submit its report to the Centre by October 31.

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