GST Collection Analysis: State-wise Breakdown and IGST Settlement

The Lok Sabha Unstarred Question No. 2373, scheduled for response on Monday, the 18th of December, 2023, delves into the intricate details of the collection and distribution of Central Goods and Services Tax (CGST), State Goods and Services Tax (SGST), and Integrated Goods and Services Tax (IGST) by the Government of India. Raised by Shri Syed Imtiaz Jaleel, the question seeks comprehensive information on various aspects of the Goods and Services Tax (GST) system, focusing on the financial years over the last half-decade.

The Minister of State in the Ministry of Finance, Shri Pankaj Chaudhary, provides detailed responses to the queries, shedding light on the amounts collected under CGST, SGST, and IGST, the distribution of GST to states, the unsettled amounts in the IGST account, and the government’s approach to ensuring timely settlement. The responses include valuable insights into the GST landscape, addressing concerns about delays, and presenting an internal study conducted by the Department of Revenue in May 2023, emphasizing the transformative impact of GST on revenue collection. The following analysis dissects the Minister’s responses, unraveling the complexities of GST administration and providing a glimpse into the economic dynamics shaping the nation’s fiscal policies.

GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
LOK SABHA UNSTARRED QUESTION NO. 2373
TO BE ANSWERED ON MONDAY, THE 18th DECEMBER, 2023

Collection of CST/SGST/IGST

2373. SHRI SYED IMTIAZ JALEEL:

Will the Minister of FINANCE be pleased to state:

(a) the amount of Central Goods and Services Tax (CGST), State Goods and Services Tax (SGST) and Integrated Goods and Services Tax (IGST) separately collected from all goods and services during the last five financial years, year-wise;

(b) the details of GST transferred to the States and the quantum retained by the Government since 2014, State-wise especially for the State of Tamil Nadu;

(c) the details of the unsettled amount in IGST account during the last five financial years, year-wise;

(d) the reasons for delay in transferring States’ share of GST from IGST account, especially for the State of Tamil Nadu;

(e) the steps taken/likely to be taken by the Government to ensure timely settlement of IGST account;

(f) whether the GST Council or Government has undertaken any study to compare projected revenue collection by States under pre-GST period and the actual revenue accrued to States after GST; and

(g) if so, the details thereof and if not, the reasons therefor?

ANSWER

THE MINISTER OF STATE IN MINISTRY OF FINANCE
(SHRI PANKAJ CHAUDHARY)

(a): The details of Goods and Services Tax (GST) collection on domestic transactions under the head Central Goods and Services Tax (CGST), State Goods and Services Tax (SGST) and Integrated Goods and Services Tax (IGST) during the last five financial years are as under: –

(in Rs. Crores)

(b): The details of IGST settlement to States (Regular and Ad-hoc) and the quantum pertaining to the Government during the last five years are given as per Annexure.

(c): The details of unsettled amount of IGST during the last five years are given as under: –

(d) & (e): No Sir. There has been no delay in transferring of IGST to the States including the State of Tamil Nadu. GST collection consists of CGST, SGST and IGST. CGST is credited to Consolidated Fund of India (CFI) while SGST is credited to the Consolidated Fund of respective States. IGST is being levied and collected by the Centre. The IGST (Domestic + Imports) so collected is apportioned / settled between the Union and the States/UTs on monthly basis (by the end of every month), on the basis of place of consumption and cross utilization of ITC (Input Tax Credit) as envisaged under Goods and Services Tax Settlement of Funds Rules, 2017. For the amount of IGST remaining un-apportioned, provisional/advance settlement is done from time to time on an ad-hoc basis between Centre and States/UTs in the ratio of 50:50.

(f) & (g): An internal study was conducted by the Department of Revenue in May 2023, the details of which was published on May 24, 2023 in a leading business daily in an article titled “GST has been a game-changer”. Gist of the study is as follows:

(i) The average growth rate of gross overall GST revenues (States plus Centre) for the period 2018-19 to 2022-23 is 12.3 per cent as compared to average nominal GDP growth rate of 9.8 per cent, implying a tax buoyancy of 1.25. In comparison, for the five-year period of 2012-17 (pre-GST period), the buoyancy of taxes which were subsumed in GST (States plus Centre) was only 0.9988.

(ii) During 2018-23, States’ SGST revenues (including compensation released to States) witnessed a buoyancy of 1.22. This totals to revenues of ₹37.7 trillion to the States in this period and include post-settlement revenues of over ₹29.2 trillion and compensation of ₹8.5 trillion released during this post-GST five-year period. Even without compensation, State GST revenues have witnessed a buoyancy of 1.15. In comparison, revenue of States from the taxes subsumed in GST witnessed a growth rate of a mere 8.3 per cent in the pre-GST four-year period 2012-16. The GDP growth during said period was 11.5 per cent, signifying a buoyancy of 0.72, way less than 1.

*****

Annexure

Details of IGST settlement to States (Regular and Ad-hoc)

(in Rs. Crore)

Details of IGST retained by the Centre

(in Rs. Crore)