Tamil Nadu has displaced Karnataka to emerge as the third largest state in terms of own tax revenue collections in the first half of the current fiscal, driven largely by excise duty on liquor sales.  Maharashtra and Uttar Pradesh take the first two positions.

According to the provisional figures from the Comptroller and Auditor General of India, Tamil Nadu has mopped up ₹68,638 crore in State’s Own Tax Revenue (SOTR) collections between April-September against Karnataka’s ₹66,158 crore tax collection. Karnataka’s SOTR in the same period of the previous fiscal stood at ₹53,566 crore against Tamil Nadu’s ₹50,324 crore.

Maharashtra and Uttar Pradesh mopped up ₹1,15,211 crore and ₹1,02,687 crore respectively in SOTR in the first six months of the current fiscal.

Tamil Nadu’s healthy numbers

SOTR broadly includes revenues earned through State GST, Stamp & registration fees, Sales Tax, State Excise duty, and Land revenue. Some States also levy other taxes. Strong SOTR growth is an indicator of healthy state finances as higher own tax revenue collections means lesser dependence on Centre for devolution and grants. 

All components of Tamil Nadu’s SOTR showed healthy growth in H1 FY23. State Excise duty on liquor sales saw the highest growth of 52 per cent to ₹5,351 crore in the half-yearly period against ₹3,496 crore in the same period last year. Sales tax -- the largest component of own tax revenues -- grew by 32 per cent to ₹28,214 crore (₹21,328 crore).

SGST, led by growth in consumption, grew by 37 per cent to ₹26,285 crore (₹19,173 crore). Reflecting the pick-up in real estate activity, the State’s Stamp & registration fees grew by 39 per cent to ₹8,662 crore (₹6,237 crore). 

Maharashtra, Kerala top in growth rate 

Maharashtra registered 42 per cent growth in own tax revenue collections (year-on-year) at ₹1,15,211 crore (₹81,395 crore) in the first half of the year. The State was followed by Kerala (41 per cent), Tamil Nadu (36 per cent), Gujarat (31 per cent) and Uttar Pradesh (29 per cent).

Kerala’s own revenue grew by 41 per cent to ₹33,175 crore. This is the highest among southern States. While Telangana’s own tax revenue grew by 26 per cent to ₹50,660 crore, Karnataka recorded a 24 per cent growth to ₹66,158 crore. With a 9 per cent growth rate, Andhra Pradesh recorded the lowest growth in own tax collections among southern States at ₹39,737 crore during the April-September period.