Central GST Collections Outpace States Despite Fewer Assessees

By Author / May 7, 2025
56th GST Council News | GST Updates 2025

Centre Leads in Per Assessee Collection

Despite having fewer GSTINs, the Central Government outperforms States in average GST collection per assessee. In April 2025, the Centre collected about ₹1.4 lakh per GSTIN, while States collected around ₹1.14 lakh. This trend will likely feature in the upcoming GST Council meeting.

Haryana and Maharashtra Report Strongest Collections

Data show that Central formations in all States record higher per GSTIN collections. Haryana leads with over ₹3 lakh in average tax paid, followed by Maharashtra. In contrast, Uttar Pradesh, which has the highest number of GSTINs, shows the lowest per GSTIN collection among major States.

Inter-State Supply Structure Favors the Centre

A tax expert explained that the GST revenue split depends on whether a supply is inter-State or intra-State. The Centre collects Integrated GST (IGST) on inter-State transactions and later apportions it to the destination States. This benefits consumption-heavy States but leaves assessees under State jurisdiction with lower per-GSTIN contributions.

Delay in IGST Transfer Affects States

Experts noted that delays in transferring IGST proceeds to States under the compensation formula reduce the effective revenue. “The Centre’s enforcement agencies—like the DGGI and CGST Commissionerates—are better equipped with technology and systems. This leads to more effective compliance and lower tax evasion,” one expert said.

Tech Upgrades and Policy Reforms Recommended

To close the gap, experts recommend stronger technology and analytics within the GSTN. Expanding e-invoicing and automating reconciliation will improve reporting accuracy. Real-time IGST data sharing is also essential for fair apportionment.

Towards Equitable Revenue Sharing

“Policy reforms should consider State-specific factors in the IGST apportionment formula,” an expert suggested. He also advocated for a joint Centre-State committee to conduct regular revenue analysis and benchmark best practices. This approach will enable targeted interventions and improved coordination.

Current Administrative Division of GST Assessees

As per the GST Council circular dated September 20, 2017:

• For taxpayers with turnover below ₹1.5 crore:
  • States manage 90%
  • Centre manages 10% (except in J&K and UTs)
• For taxpayers above ₹1.5 crore:
  • Centre and States each manage 50%

Assessee distribution is done by a computer algorithm at the State level, using stratified random sampling. The process may also consider geography and taxpayer type.