It is possible, but the available information does not establish that it will. A report dated 5 October 2026 describes proposals expected before the 57th GST Council meeting, including protection for eligible input tax credit (ITC) claimed by genuine buyers when suppliers default. It does not identify a specific amendment as a remedy for Keralam’s revenue leakage or quantify any effect on the state. As of 7 October 2026, the reviewed report described proposals, not Council decisions.
What is the 57th GST Council meeting proposing?
A 5 October 2026 report by TaxO, citing News18, described several possible reforms on the 57th meeting’s agenda. They include protecting eligible ITC for genuine buyers when suppliers default, simplifying registration and returns, and changes to enforcement and low-value tax disputes. The report also refers to movement of goods.
These are reported proposals, not adopted rules. The report says legal changes would be needed if the Council approved relevant measures. The sources available as of 7 October 2026 do not identify the exact amendment meant to address Keralam’s revenue concerns, provide its text, or explain how it would change state revenue. It would therefore be premature to say that the ITC proposal—or any other reported item—will reduce the state’s leakage.
Why is Keralam concerned about GST revenue?
Two different concerns appear in the official record: a past gap between growth in SGST and IGST, and a later estimate of losses associated with rate rationalisation. They should not be treated as proof of one specific leakage mechanism.
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Earlier concern about SGST and IGST growth
The agenda for the GST Council’s 54th meeting records Keralam’s representative as saying annual SGST revenue had grown by 10–11%, while IGST growth was 3%. The representative described the disparity as systemic and urged that it be addressed. This is a historical comparison recorded in the 54th meeting agenda; it does not show that a 57th-meeting proposal changes IGST settlement or allocation.
Estimated losses from rate rationalisation
In a reply to Lok Sabha Starred Question 216 on 15 December 2025, the Ministry of Finance reported that Keralam’s finance minister had raised the state’s consumption mix at the 56th Council meeting. The state said many commonly consumed items attracted higher rates, leaving it with a relatively higher revenue loss from rationalisation. Keralam estimated an annual loss of more than ₹8,000 crore, including about ₹2,500 crore across automobiles, insurance, cement and electronics. These are state estimates, not audited final outcomes. The figures and the state’s explanation appear in the Ministry of Finance’s parliamentary reply.
What do the national revenue projections show—and what don’t they show?
The same 2025 parliamentary reply gives central projections based on 2023–24 consumption and value-chain data. It projected ₹45,570 crore in additional revenue from items moved from the 28% to 40% bracket, against a ₹93,300 crore net negative revenue implication for the broader rationalisation. The reply described the combined net negative as about ₹47,700 crore.
Those national projections do not measure Keralam’s realized losses or predict what the 57th Council proposals would recover for the state. The Ministry cautioned that the projections should not be treated as definitive: collections can grow, while lower rates may improve compliance and reduce disputes. Actual revenue depends on how these and other factors play out.
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The effect depends on what the amendment changes. A measure that makes it easier for a genuine buyer to retain eligible ITC when a supplier defaults could address a compliance and credit-allocation problem. A change to registration, returns, enforcement or dispute handling could affect administration or compliance. But none of those descriptions, on its own, establishes that money would flow to Keralam or that an SGST–IGST growth gap would narrow.
To connect a proposed rule to Keralam’s revenue, the amendment text and its operation would need to establish at least:
- The mechanism: which existing provision or process changes, and whether the issue concerns ITC, tax collection, settlement or allocation.
- The revenue channel: whether the change affects state SGST receipts, IGST settlement to the state, or only compliance and administration.
- The scale and evidence: whether any forecast is specific to Keralam and how it is distinguished from estimates or later collections.
- The legal status: whether the Council has recommended it, the necessary legal instrument has been issued, and an effective date has been set.
When would a proposal become an operative GST rule?
A Council discussion or recommendation is not, by itself, proof that a change is in force. The official account of the 56th GST Council meeting shows that its rate-rationalisation package included specified implementation dates and that some measures required further notifications or legal amendments.
For any item reported ahead of the 57th meeting, readers should distinguish a proposal from a Council recommendation, then check for the applicable notification or statutory amendment and its effective date. Until those details are available, claims about a definite reduction in Keralam’s revenue leakage remain unconfirmed.
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