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Delhi, West Bengal and Tamil Nadu register decline in SGST collections in Q1 FY27 The first quarter of the new fiscal year of 2026-27, after the implementation of GST 2.0 in September 2025, presented a mixed picture for State Goods and Services Tax (SGST) collections across India. Nationwide SGST collections growth slowed to 3.4 per cent year-on-year during April-June of 2026 (Q1 FY27), from 8.9 per cent a year earlier and 10.7 per cent in the corresponding quarter of FY25. The moderation was accompanied by significant divergence among States, with five major States, including consumption powerhouses like Delhi and Tamil Nadu, reporting a decline in SGST collections even as several others posted double-digit growth, indicating that the impact of the new GST regime has varied across regional economies. Five States enter negative territory Delhi recorded the steepest contraction in SGST collections among the 20 largest States by GST collections, with collections declining by 11.9 per cent year-on-year in the first quarter of FY27. This marked a sharp reversal from growth of 24.4 per cent in the same period a year ago. Tamil Nadu and West Bengal also entered negative territory, with collections falling 2.8 per cent and 2.0 per cent respectively. According to Manoj Mishra, partner at Grant Thornton Bharat, GST 2.0 rate rationalisation has reduced the tax incidence on several consumption-oriented sectors, and States with greater exposure to such sectors are likely to see a temporary moderation in own SGST collections despite stable transaction volumes. Delhi, which is among the bigger consumers of automobiles and white goods, underwent a significant reduction in large GST rate, which could have witnessed a reduction in collections as a result. However, the White Paper on the Fiscal Management of Tamil Nadu brought out by the new TVK government, points towards inefficient tax collection as one of the major reasons for the de-growth in SGST collections in TN. The growth of GST is lesser than peer States, reflects administrative inefficiencies in the Commercial Taxes Department of the State, that has been hindered by systemic corruption in the Department, read the report. Traditionally lower consumption States like Jharkhand followed with an 8.7 per cent decline after recording 13.1 per cent growth in Q1 FY26, while Bihar slipped 7.9 per cent compared with 16.2 per cent growth a year earlier. Kerala, Chhattisgarh lead SGST collections growth At the other end of the spectrum, Kerala recorded the fastest SGST growth among the States covered, with collections rising 14.7 per cent year-on-year during the quarter, improving from 6.3 per cent growth in Q1 FY26. Chhattisgarh followed with 10.9 per cent growth, while Odisha rebounded strongly to 10.6 per cent after recording a marginal contraction last year. Telangana also crossed the double-digit mark with 10.2 per cent growth. Stronger growth in Karnataka, Gujarat, Uttar Pradesh, Kerala and Telangana suggests that sectoral composition, manufacturing and services activity, and compliance levels are also influencing revenue outcomes , explained Mr. Mishra. However, experts also point towards the high inflation in Kerala, which was the highest in the country, as it may have artificially inflated tax collection figures. Additionally, improved GST governance and enforcement efforts have contributed to the up-tick in revenue receipts. www.thehindubusinessline.com, dt. 08-07-2026

Delhi, West Bengal and Tamil Nadu register decline in SGST collections in Q1 FY27

The first quarter of the new fiscal year of 2026-27, after the implementation of GST 2.0 in September 2025, presented a mixed picture for State Goods and Services Tax (SGST) collections across India. Nationwide SGST collections growth slowed to 3.4 per cent year-on-year during April-June of 2026 (Q1 FY27), from 8.9 per cent a year earlier and 10.7 per cent in the corresponding quarter of FY25.

The moderation was accompanied by significant divergence among States, with five major States, including consumption powerhouses like Delhi and Tamil Nadu, reporting a decline in SGST collections even as several others posted double-digit growth, indicating that the impact of the new GST regime has varied across regional economies.

Five States enter negative territory

Delhi recorded the steepest contraction in SGST collections among the 20 largest States by GST collections, with collections declining by 11.9 per cent year-on-year in the first quarter of FY27. This marked a sharp reversal from growth of 24.4 per cent in the same period a year ago. Tamil Nadu and West Bengal also entered negative territory, with collections falling 2.8 per cent and 2.0 per cent respectively.

According to Manoj Mishra, partner at Grant Thornton Bharat, GST 2.0 rate rationalisation has reduced the tax incidence on several consumption-oriented sectors, and States with greater exposure to such sectors are likely to see a temporary moderation in own SGST collections despite stable transaction volumes.

Delhi, which is among the bigger consumers of automobiles and white goods, underwent a significant reduction in large GST rate, which could have witnessed a reduction in collections as a result.

However, the White Paper on the Fiscal Management of Tamil Nadu brought out by the new TVK government, points towards inefficient tax collection as one of the major reasons for the de-growth in SGST collections in TN. The growth of GST is lesser than peer States, reflects administrative inefficiencies in the Commercial Taxes Department of the State, that has been hindered by systemic corruption in the Department, read the report.

Traditionally lower consumption States like Jharkhand followed with an 8.7 per cent decline after recording 13.1 per cent growth in Q1 FY26, while Bihar slipped 7.9 per cent compared with 16.2 per cent growth a year earlier.

Kerala, Chhattisgarh lead SGST collections growth

At the other end of the spectrum, Kerala recorded the fastest SGST growth among the States covered, with collections rising 14.7 per cent year-on-year during the quarter, improving from 6.3 per cent growth in Q1 FY26. Chhattisgarh followed with 10.9 per cent growth, while Odisha rebounded strongly to 10.6 per cent after recording a marginal contraction last year. Telangana also crossed the double-digit mark with 10.2 per cent growth.

Stronger growth in Karnataka, Gujarat, Uttar Pradesh, Kerala and Telangana suggests that sectoral composition, manufacturing and services activity, and compliance levels are also influencing revenue outcomes , explained Mr. Mishra.

However, experts also point towards the high inflation in Kerala, which was the highest in the country, as it may have artificially inflated tax collection figures. Additionally, improved GST governance and enforcement efforts have contributed to the up-tick in revenue receipts.

www.thehindubusinessline.com, dt. 08-07-2026