The Union Ministry of Finance has released detailed data on central taxes, GST and cess/surcharge collections from Karnataka over the past four financial years, revealing a sharp and consistent rise in the State’s contribution to the national exchequer. The figures were provided in a written reply by Minister of State for Finance Pankaj Chaudhary to an unstarred question in the Lok Sabha.

GST Collections Surge Nearly 66% in Four Years

According to the data, Karnataka’s gross GST collections—comprising CGST, SGST, IGST, and Compensation Cess—grew from ₹95,926 crore in 2021–22 to ₹1,59,563 crore in 2024–25.
Year-wise collections were as follows:

• 2021–22: ₹95,926 crore
• 2022–23: ₹1,22,821 crore
• 2023–24: ₹1,45,265 crore
• 2024–25: ₹1,59,563 crore

Each component of GST reflected a steady upward trend. CGST rose from ₹22,697 crore to ₹36,905 crore, while SGST increased from ₹28,660 crore to ₹45,314 crore during the same period. IGST and Compensation Cess collections also posted significant growth.

₹1.92 Lakh Crore Released to Karnataka Through Devolution and Grants

Alongside taxes collected, the Centre also detailed the funds transferred to Karnataka through tax devolution, grants-in-aid, and special assistance for capital expenditure.

Between 2021–22 and 2024–25, Karnataka received:

• ₹1,56,005 crore through tax devolution
• ₹23,811 crore as grants-in-aid (including NDRF-linked support)
• ₹13,026 crore under the Special Assistance Scheme for Capital Investment (SASCI)

This totals to ₹1,92,842 crore in central transfers over four years.

No Pending Special Grants for Karnataka, Says Centre

Responding to a query on whether any special grants recommended by the Finance Commission were pending for Karnataka, the government clarified that no such grants remain unreleased.

No Proposal to Devise New Mechanism for Post-GST Compensation Loss

Karnataka, like other producing States, has repeatedly raised concerns about revenue loss after the expiry of the GST compensation mechanism in June 2022. However, the Centre categorically stated that there is no proposal under consideration to create any alternative mechanism to compensate producing States for post-GST compensation revenue loss.

Context and Significance

The data assumes political and fiscal significance as Karnataka continues to debate the GST regime’s impact on its revenue autonomy, especially given its status among the top GST-contributing States. The steady rise in GST collections underscores Karnataka’s expanding economic base, with significant contributions from manufacturing, IT services, e-commerce, and inter-State supplies reflected in high IGST numbers.

At the same time, the Centre’s clarity on the absence of new compensation frameworks may reignite discussions on fiscal federalism, particularly among States that have voiced concerns over the cessation of GST compensation.

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