📷 Image: Wikimedia Commons / Ministry of Finance of India
Business
GST Council postpones ITC relief, averting Rs 1,500 crore loss for Karnataka
✍️ The Times of India
🗓 10 Oct 2026, 01:47 PM
👁 12
The GST Council has decided to defer the proposed Input Tax Credit relief, a move that Karnataka's finance department says will prevent an estimated annual revenue loss of around Rs 1,500 crore.
The Goods and Services Tax (GST) Council met in New Delhi and chose to postpone the implementation of the long‑awaited Input Tax Credit (ITC) relief for businesses. The decision means the relief, which was slated to ease tax compliance for many firms, will not take effect until a later date.
The deferred relief was expected to allow eligible taxpayers to claim credit on a broader range of purchases, thereby reducing their tax outgo. While the measure was welcomed by industry groups, it would also cut the tax base, leading to lower collections for state governments.
Karnataka's finance department estimated that the postponement will shield the state from an annual revenue shortfall of roughly Rs 1,500 crore. Officials said the figure reflects the projected loss had the relief been applied immediately, and the council's timing helps the state maintain its fiscal plans for the current financial year.
The council’s move underscores the delicate balance between providing tax relief to boost business activity and safeguarding revenue streams for states that rely heavily on GST collections.
The deferred relief was expected to allow eligible taxpayers to claim credit on a broader range of purchases, thereby reducing their tax outgo. While the measure was welcomed by industry groups, it would also cut the tax base, leading to lower collections for state governments.
Karnataka's finance department estimated that the postponement will shield the state from an annual revenue shortfall of roughly Rs 1,500 crore. Officials said the figure reflects the projected loss had the relief been applied immediately, and the council's timing helps the state maintain its fiscal plans for the current financial year.
The council’s move underscores the delicate balance between providing tax relief to boost business activity and safeguarding revenue streams for states that rely heavily on GST collections.