The top 10 importing states which also include Gujarat, Rajasthan, Telangana, Madhya Pradesh, West Bengal and Bihar account for half of the IGST proceeds collected by all states on imports and inter-state trade in the first 11 months of FY24, showed data from GSTN, the company that processes GST returns.

North-eastern states Manipur, Nagaland, Mizoram, and Sikkim, Union territory Daman and Diu and islands Andaman and Nicobar and Lakshadweep account for the lowest tax collections on account of imports, showing their weakness in consumption. In the GST regime, it is the importing state that gets the tax proceeds on inter-state trade, giving consuming states an edge, unlike in the earlier regime in which proceeds of central sales tax (CST) on inter-state sales went to the exporting state. In the case of imports from outside the country too, IGST proceeds go to the state where consumption happens. Large state economies have a higher consumption base.

In the first 11 months of FY24, Rs. 4.97 trillion of IGST was settled among states, with Maharashtra collecting ₹44,126 crore, followed by Uttar Pradesh (Rs. 41,381 crore), Karnataka ( ₹31,922 crore) and Tamil Nadu ( ₹22,340 crore). Gujarat collected ₹20,298 crore. The top five states accounted for a third of all IGST collections in the April-February period of FY24.

Maharashtra, Uttar Pradesh, Karnataka, Tamil Nadu and Gujarat also topped in terms of the total state GST collections in FY24. 

"Economic strength and population influence the extent of tax collections in the GST regime as it is a destination-based tax on consumption. When goods are imported from outside the country, IGST is initially paid in the importing state and if goods are further supplied to the end consumer in another state, credit for the IGST already paid is used to meet the tax liability on that inter-state supply. Ultimately, the tax proceeds go to the state where the consumption happens," explained Abhishek Jain, indirect tax head & partner at KPMG.

Both the purchasing power of people and the population count help in these revenue receipts. Maharashtra, Karnataka, Uttar Pradesh and Tamil Nadu also lead in terms of collection of GST cess levied mainly on automobiles, with the highest rates applicable on sports utility vehicles. Aerated drinks and tobacco also attract cess.

The Centre and states reported strong GST collections in FY24 with Uttar Pradesh reporting a 16% jump and Maharashtra and Karnataka a 15% jump each, while Tamil Nadu reported a 13% improvement in revenue collections. States reported an overall 13% rise in GST collections in FY24 to ₹8.74 trillion.