Tamil Nadu Achieves 20.12% SGST Growth, Tops India in H1 FY25

Tamil Nadu has emerged as the top-performing state in State Goods and Services Tax (SGST) collections, recording a remarkable 20.12% growth in the first half (H1) of FY2024-25. According to data from the Comptroller and Auditor-General of India (CAG), the state’s SGST revenue rose to ₹35,414.05 crore from ₹29,481.97 crore during the same period last year.

This growth outpaces other major states, including Gujarat (14.03%), Uttar Pradesh (14.35%), Maharashtra (13.46%), and Karnataka (10.56%). Officials credit the state’s strong performance to administrative reforms, efforts to plug revenue leakage, and the resolution of Integrated Goods and Services Tax (IGST) credit issues.

The SGST contributes nearly half of Tamil Nadu’s State Own Tax Revenue (SOTR), highlighting its importance to the state’s finances. Tamil Nadu’s Commercial Taxes Department implemented a range of measures, including creating a Tax Research Unit in December 2022. This unit played a crucial role in identifying issues related to IGST, including taxpayers who failed to utilize available credits, leading to increased revenue generation.

Additionally, a Big Data Analytics Unit was set up to identify revenue loss trends and improve compliance. Through detailed scrutiny and innovative use of data, the state successfully recovered additional revenue. Officials also reported the introduction of new territorial and intelligence divisions, the filling of vacancies, and addressing long-pending issues related to promotions, further enhancing tax compliance.

Tamil Nadu’s growth reflects broader national trends in GST collection but stands out for its consistent year-on-year performance. This is especially significant given the competition among leading states. Maharashtra collected ₹78,179.77 crore in H1 FY2024-25 but with a lower growth rate of 13.46%.

Experts from India Ratings and Research highlighted Tamil Nadu’s focus on administrative efficiency as a key driver of its growth. The state’s proactive measures demonstrate a roadmap for other states aiming to enhance their tax revenues.

With sustained reforms and data-driven policies, Tamil Nadu is setting benchmarks in effective tax administration and economic governance.