New Delhi: Finance minister Nirmala Sitharaman has panned views that GST collections were solely benefiting the Centre. In a post on X, she said states get 100 per cent of the state GST (SGST) collected within the state, around 50 per cent of the integrated GST (IGST), and 42 per cent of central GST (CGST) through devolution based on the Finance Commission’s recommendations.
“It is a myth that all GST collections are pocketed by the Centre,” she wrote. “GST has improved tax buoyancy from 0.72 (pre-GST) to 1.22 (2018-23). Despite compensation ending, state revenues remain buoyant at 1.15”.
“Without GST, states’ revenues from subsumed taxes from 2018-19 to 2023-24 would have been Rs 37.5 trillion. With GST, states’ actual revenue amounted to Rs 46.56 trillion,” she further wrote.
“Despite the GST rate being less than the prescribed Revenue Neutral Rate and COVID-19 affecting the revenues, GST collections (as a % of GDP) have now reached the levels they were before GST (both net and gross). This demonstrates that the Centre & States, collectively, through better tax administration, are able to collect the same revenue with a lower burden on our taxpayers,” Sitharaman wrote.
