At 8% own tax income share of Gross State Domestic Product (GSDP) for budget estimates for this fiscal, is second only to UP (10.3%) in the country, according to the recent ‘State of Finance Report (2022-23)’.
The two states are followed by Jharkhand (also 8%), Kerala (7.9%) and Haryana (7.5%). The Average GSDP-to-own-income ratio in the country is 6%.
A higher ratio of own tax income to GSDP indicates that the state has a better ability to collect taxes from its economic activities.A variety of factors influence tax collection, including income level, economic structure, tax rate and tax administration, according to analysts.
The report observed that the key sources of own tax revenue for states in 2022-23 is SGST (42%), sales tax/VAT (23%), state excise duty (14%), stamp duty (11%), vehicle taxes (5%), and electricity taxes and duties (3%). For Telangana, SGST share is (2.7%), sales tax/VAT (2.5%), excise duty (1.3%), stamp duty (1.2%) and other sources (0.4%).
According to the report, the GST Council has been given authority to decide on rates for a significant portion of state’s own tax revenue.
In 2022-23 fiscal, states have estimated that their own non-tax revenue will be about 1.3% of GSDP.The level of own non-tax revenue varies greatly across states.For instance, Odisha, Chhattisgarh and Jharkhand have estimated significantly higher non-tax revenue, primarily from mining royalties.