GST rejig to fetch Rs 10L cr to States
Further, Rs 4.1 lakh cr through devolution: SBI Research
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New Delhi: States will remain net gainers from GST collections in FY26 even under the proposed rate rationalisation — and are expected to receive at least Rs10 lakh crore in SGST plus Rs4.1 lakh crore through devolution, an SBI Research report said on Tuesday.
This is because of the unique revenue-sharing architecture of the tax. First, GST is shared equally between the Centre and the States, with each receiving 50 per cent of the collections. Second, under the mechanism of tax devolution, 41 per cent of the Centre’s share flows back to the states.
“Taken together, this means that out of every Rs100 of GST collected, States ultimately accrue nearly Rs70.5 — approximately 70 per cent of total GST revenues,” the report noted. The gains accrues even when we do not take the additional consumption boost due to rate rationalisation (at 9.5 per cent effective GST rate, this translates into a revenue gain of Rs 52,000 crore; Rs 26,000 crore each to Centre and states).
