• Dr. AjuSaigal LFICWLS, FIETE, MIEI

The Goods and Services Tax (GST) was introduced in India as a landmark reform to unify the nation’s indirect tax regime. A key component of GST, the Integrated Goods and Services Tax (IGST), is intended to facilitate fair revenue sharing between the Union and States for inter-state transactions. However, concerns have arisen regarding the efficacy and fairness of the IGST allocation mechanism, particularly in states like Kerala, which report lower-than-expected receipts from IGST settlements. This study investigates the impact of IGST allocation mechanisms on the fiscal position of the state of Kerala. Using a combination of quantitative data from government reports and qualitative inputs from tax officials and policy experts, the research analyses trends in IGST revenue distribution, identifies structural bottlenecks in the current mechanism, and assesses their implications for Kerala’s budgetary health. Key findings reveal inconsistencies in settlement timelines, issues with cross-utilization of credits, and a consumption-based allocation model that disadvantages certain states. The study concludes with policy recommendations to improve transparency, efficiency, and equity in IGST allocation, thereby enhancing the financial autonomy of states under India’s federal structure.

IGST, GST in India, State Revenue, Kerala Economy, Fiscal Federalism, GST Settlement Mechanism, Inter-State Trade

"The Impact of IGST Allocation Mechanisms on State Revenues: A Study of Kerala", International Journal of Emerging Technologies and Innovative Research (www.jetir.org), ISSN:2349-5162, Vol.12, Issue 4, page no.n387-n404, April-2025, Available :http://www.jetir.org/papers/JETIR2504D50.pdf

"The Impact of IGST Allocation Mechanisms on State Revenues: A Study of Kerala", International Journal of Emerging Technologies and Innovative Research (www.jetir.org | UGC and issn Approved), ISSN:2349-5162, Vol.12, Issue 4, page no. ppn387-n404, April-2025, Available at : http://www.jetir.org/papers/JETIR2504D50.pdf