Though the GST revenue collection for the month of September and October 2020 is often highlighted as a sign of economic recovery from the shock of the pandemic, states are still in the red zone. This is mainly because the loss recorded during the two-quarter period (March to August 2020) outweighs the recent gains. While GST is sloganed as "one nation one tax", the pace of recovery as well as the extent of revenue loss need not necessarily be uniform across states/union territories given the variation in income, population and per-capita GST. This article explores inter-state variation with respect to GST revenue.

The relevant data of the GST collection of each state/union territory were taken from the GST website (www.gst.gov.in) from March to August for years 2019 and 2020. Based on the state-wise population (2011 Census), per-capita GST across states have been estimated. For the present analysis, GST revenue of state/union territory is the sum of SGST (State Goods and Services Tax) and IGST (Integrated Goods and Services Tax) settlement to states. GST devolution from Government of India in accordance with the finance commission is not included as 'State revenue' in this analysis.

GST collection across states

Table 1 presents data on GST revenue collection of 30 states (including Union Territory of Puducherry) of India in the Pre-COVID and COVID period. Pre-COVID period is defined as March to August in the year 2019, and the corresponding period in 2020 is defined as COVID period. The share of five states - Maharashtra, Uttar Pradesh, Tamil Nadu, Karnataka, and Gujarat - is approximately 50 per cent of aggregate states’ GST revenue. This pattern holds good during Pre-COVID and COVID period. This high concentration in GST collection is in sync with their high contribution towards GDP of the country (47.9 per cent) as per the state GDP data for 2018-19. Similarly, they also account for 42.3 per cent of the population as consumers of goods and services. This implies that on an average 1 per cent of population in these states contribute to 1.17 per cent of tax revenue.

Table 1. Pre-Covid and Covid period GST revenue