Who Will Get GST Money?

At GST Suvidha Online, we aim to simplify complex taxation systems for businesses and individuals across India. One of the most common questions we receive is: “Who will get GST money?” This question is vital because it not only addresses the flow of tax revenue but also explains how India’s federal structure works under the Goods and Services Tax (GST).

In this article, we’ll cover:

• How GST is collected
  
  
• Who gets GST revenue (Central & State Governments)
  
  
• How the revenue is shared under current policies
  
  
• Updates as per the latest GST Council decisions
  
  
• Impact on businesses and consumers
  
  

Understanding GST Collection

GST (Goods and Services Tax) is a destination-based tax, meaning the tax goes to the state where goods or services are consumed, not where they are produced.

There are three major types of GST in India:

Type of GST	Full Form	Collected By	Applicable On
CGST	Central Goods and Services Tax	Central Government	Intra-state sales
SGST	State Goods and Services Tax	State Government	Intra-state sales
IGST	Integrated Goods and Services Tax	Central Government (later shared with states)	Inter-state sales & imports

 

Revenue Sharing Between Centre & States

When you pay GST, your money doesn’t go to just one government body. Instead, it is distributed between Central and State Governments.

🔹 Example of Tax Split (Latest Policy)

Suppose a product worth ₹1,000 is sold with 18% GST (₹180):

Component	Percentage	Collected By	Amount
CGST	9%	Central Govt	₹90
SGST	9%	State Govt	₹90
IGST (if inter-state)	18%	Central Govt (then apportioned to states)	₹180

👉 In intra-state sales, both Centre and State share equally.
👉 In inter-state sales, the Centre collects IGST, but then transfers the revenue to the consuming state.

 

Who Ultimately Gets the GST Money?

1. Central Government (CGST + IGST share)
   
   
   • Funds national infrastructure, defence, central schemes.
     
     
   • Used for subsidies, healthcare, and education.
     
     
2. State Governments (SGST + IGST share)
   
   
   • Funds state welfare schemes, rural development, roads, state hospitals.
     
     
   • Critical for state-level governance and social programs.
     
     

New GST Policy Updates (as per recent GST Council decisions)

The GST Council has recently introduced new rules for revenue distribution to ensure fairness and stability for states:

Policy Change	Impact
GST Compensation Cess extended on luxury/sin goods	Helps states cover revenue losses post-GST rollout
More IGST settlements to states	Ensures consuming states get fair share
Digital monitoring of GST collections	Better compliance and transparency
Unified GSTN data sharing	Helps Centre and States track revenue in real time

 

How GST Impacts Businesses & Consumers

• For Businesses: GST input tax credit ensures they don’t pay tax on tax, reducing the overall burden.
  
  
• For Consumers: Tax becomes more transparent, and the final cost reflects only the consumption-based tax.
  
  
• For Governments: Both Centre and States have a steady and predictable revenue stream.
  
  

 

GST Revenue Trend (Illustrative Table)

Year	GST Revenue Collected (₹ Lakh Crore)	Growth %
2017-18	7.2	–
2018-19	11.8	+63%
2019-20	12.2	+3%
2020-21	12.2	0% (Pandemic impact)
2021-22	14.8	+21%
2022-23	18.1	+22%
2023-24*	20.2 (est.)	+11%

*Source: Government reports & GST Council updates

 

Key Takeaways

• GST money is shared between the Centre and States.
  
  
• Intra-state sales → CGST + SGST (shared equally).
  
  
• Inter-state sales → IGST (collected by Centre, distributed to consuming states).
  
  
• New policies ensure fairer revenue distribution and better compliance.
  
  

 

Call to Action

Managing GST compliance, registration, and filing can be overwhelming for businesses. At GST Suvidha Online, we provide end-to-end GST solutions that make your tax journey seamless and hassle-free.

👉 Get expert GST support today at www.gstsuvidhaonline.com