Karnataka, which is readying it’s response to the 16th Finance Commission, formed recently, is set to seek sharing of cess and surcharge collected by the Centre with the States and urge the Union government to consider losses suffered by the States due to implementation of GST. Karnataka will also urge the Centre to seek the opinion of States before framing terms of reference for the commission and also in appointment of members to it.
“Karnataka will seek inclusion of cess and surcharge for the purpose of calculation for devolution of funds to the States and demand will be made that Centre should share the cess/surcharge with States. Currently, the Centre is sharing less than 5% of the total cess/surcharge collected with the States,” Revenue Minister Krishna Byre Gowda told presspersons after the State Cabinet meeting.
He said that since the last Finance Commission did not have any members from Southern States, Karnataka will seek appointment of members after consulting the States so that the needs of the States are reflected well. “The Centre consulting with States in framing terms of reference and appointment of members will build trust between the States and the Centre in the federal structure,” he said. The Centre will also be urged to increase the grants given for natural disaster management, the Minister added.
