Statsguru: Six charts show GST's revenue challenge for Centre, state govts

The latest number for the goods and services tax (GST) collection was lower than the previous month, though it showed a jump on a year-on-year basis because of a weak base. Overall, however, collections have generally trended up (chart 1).

A similar trend is seen in state goods and service tax (SGST) and the central goods and services tax (CGST) with both showing a rising trend except for the latest month (chart 2).



Cess collections have also crossed Rs 10,000 crore multiple times in recent months (chart 3).
 

There are some differences between states, however. Business Standard looked at all the states with over Rs 1,000 crore in collections. There is a significant difference in the growth rates of those at the top and the bottom.

The highest growth states of Kerala, Karnataka, Rajasthan, Maharashtra and Delhi had between 48 per cent snd 80 per cent growth compared to the same period last year. The lowest growth states of West Bengal, Telangana, Chhattisgarh, Odisha and Jharkhand had between 22 per cent and 37 per cent growth over the previous year (charts 4,5). 
 

Some of this is due to anomalies introduced by the pandemic. Regions more impacted by Covid-19 or attendant restrictions would have a lower base in the previous year. These anomalous patterns may well persist as long as the virus keeps popping up in waves of differing intensity.

But a longer-term perspective on state collections raises questions on GST’s ability to fulfil certain primary objectives. 

Mumbai-based India Ratings and Research pointed out on May 31 that GST could be falling behind on its objectives to increase tax revenue and help consuming states. SGST growth was lower during FY18-21 than was the growth of taxes subsumed under GST during FY14-17, it noted (chart 6).

StatsGuru is a weekly feature. Every Monday, Business Standard guides you through the numbers you need to know to make sense of the headlines