GST Cess Collection Surges: Maharashtra, Karnataka, and Uttar Pradesh Lead
In a significant fiscal development, Maharashtra, Karnataka, Uttar Pradesh, Odisha, and Tamil Nadu have emerged as frontrunners in the collection of Goods and Services Tax (GST) cess, primarily imposed on the sale of automobiles. Data released by the GST Council for the fiscal year up to January 2024 indicates a notable contribution from these states, aiding the Centre in repaying market loans extended to states during the pandemic crisis.
Maharashtra, boasting the largest state economy, spearheads the list with an impressive collection of ₹19,125 crore in the April-January period of the current financial year. Following closely are Karnataka with ₹13,738 crore and Uttar Pradesh with ₹13,004 crore. Odisha and Tamil Nadu also reported significant cess collections, standing at ₹7,729 crore and ₹7,291 crores respectively. Other substantial contributors include Gujarat, Haryana, Jharkhand, and West Bengal.
The GST cess, levied on automobiles, aerated drinks, and tobacco falling under the 28% GST slab, varies depending on the product and its specifications. Ranging from 1% for certain vehicles running on petrol, CNG, or LPG to as high as 290% for specific smoking mixtures, the cess serves as a crucial revenue stream for the government.
However, this levy is slated to lapse by March 2026 or earlier. Discussions are underway within the federal indirect tax body, the GST Council, regarding the potential replacement of this tax with another form, contingent upon revenue mobilization needs.
Official data also sheds light on Maharashtra and Uttar Pradesh emerging as leaders in Integrated GST (IGST) proceeds on cross-border trade, settlements facilitated by the Central government. Maharashtra has received a staggering ₹39,684 crore of IGST settlement this fiscal year, closely trailed by Uttar Pradesh with ₹37,436 crore. Other major beneficiaries include Karnataka, Tamil Nadu, Rajasthan, and Telangana.
Furthermore, Maharashtra, Gujarat, Karnataka, and Tamil Nadu maintain their positions as top performers in terms of GST collection on goods and services sold within the states. Maharashtra leads the pack, having collected ₹83,114 crore of State GST (SGST) this fiscal year, with Gujarat, Karnataka, and Uttar Pradesh following suit.
The robust growth in GST revenue receipts for both the Centre and states has been evident, with year-on-year growth ranging between 10-15% in each of the 11 months of the fiscal year. Notably, during the festive months of October and November, collections experienced a substantial surge, growing by 13.37% and 15.12% respectively. February witnessed a commendable 12.54% increase in collections, totaling ₹1.68 trillion. The monthly average collection stands at ₹1.67 trillion, according to data from the finance ministry.
The sustained growth in GST collections, coupled with the proactive efforts of leading states in cess and IGST collections, reflects a promising outlook for India’s fiscal landscape, even amidst ongoing economic challenges and uncertainties.
