GST boost: Maharashtra emerges as India’s top state tax contributor

Maharashtra has emerged as the largest contributor to states’ tax revenue in recent years since the implementation of the Goods and Services Tax (GST), supported by its high domestic consumption and large services sector, according to a report by India Ratings and Research (Ind-Ra).The rating agency said GST has strengthened state governments’ tax collections and improved tax buoyancy since its implementation on July 1, 2017.The reform replaced 17 different taxes and 13 cesses, bringing multiple central and state taxation rates and structures under a unified system.Ind-Ra’s analysis of 26 states showed that tax buoyancy improved significantly after GST implementation."The tax buoyancy of 26 states studied increased to 2.9 during FY18-FY26, i.e., post GST implementation, compared to 0.6 during FY14-FY17," Ind-Ra Economist and Director Megha Arora said.Manipur, Nagaland, Goa, Maharashtra and Sikkim recorded the highest tax buoyancy after GST was introduced.