The Goods and Services Tax (GST) regime has strengthened states’ revenue mobilisation, with state GST (SGST) collections growing faster than the pace of economic expansion since its rollout, according to a report by India Ratings and Research (Ind-Ra).
An analysis of data from 26 states showed that between FY18 and FY26, SGST collections rose at a compound annual growth rate of 9 per cent to ₹12.9 trillion, even as the gross state domestic product expanded at a slower 10.4 per cent.
In comparison, during the pre-GST period between FY13 and FY17, states’ tax collections grew 6.8 per cent to ₹3.7 trillion against GSDP growth of 11.6 per cent.
Ind-Ra attributed the stronger revenue performance to a simplified tax structure, greater use of technology and data analytics to improve compliance and expansion in the taxpayer base. Registered taxpayers increased to 16.5 million in May 2026 from 6.7 million when GST was introduced in 2017.
The report said the average tax buoyancy of states improved sharply to 2.9 during FY18-FY26 from 0.6 in the pre-GST period, indicating that tax collections have become more responsive to economic growth.
Among states, Manipur recorded the highest post-GST tax buoyancy at 10.74, followed by Nagaland (7.89), Goa (4.29), Maharashtra (3.76) and Sikkim (3.21). Bengal’s tax buoyancy improved to 1.54 from 1.05 before GST. Maharashtra and Karnataka continued to account for the largest share of overall state tax collections.
