According to Udaya Handran, the headmaster of the Tamil Nadu government, Tamil Nadu’s own tax revenues work well on most factors, except for value-added tax (VAT).
From 2024-25, the state’s own tax revenues are estimated at 1,92,752 crores in revised estimates, slightly below the £1,95,173 crores projected in budget estimates. The 2025-26 budget estimates predict revenues will grow to 2,20,895 crores. This includes CRs 1,63,930 from commercial tax, CRs 26,109 from stamps and registrations, CRs 13,441 from motor vehicle tax and CRs 12,944 from state excise tax.
“We are performing very well in the GST collection and ranked among the top states in the country. Our growth rate has surpassed the national average and we have strengthened our tax management through data analysis to effectively recover from our arbitrages,” Udayachandran said.
The GST collection is expected to increase from 2025-26 to 93,620 crore, up 22.74% from 76,277 crores from 2024-25 to 93,620 crores.
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However, he acknowledged certain challenges in digital payments and related fields. “There are some gray areas that need attention. We’re working with payment aggregators to collect data so that revenue from the digital economy flows into the system. We’re also writing to GSTN (Product and Services Tax Network) and working actively to address this issue,” he added.
The collection of automobile taxes also shows strong performance as the budget forecasts growth of over 12% at 13,441 crores in fiscal 2026. The transport vehicle segment remains buoyant, but although there is no growth trend yet, four-wheel sales have been on the rise since January.
Revenue from stamp duty and registration fees is projected to increase by 14% at 26,110 crores. However, sales tax/VAT collections from gasoline and liquor sales continue to be behind, with growth rates falling compared to other tax systems. For FY26, revenue/VAT revenue is projected to grow at 7% 70,311 crore (budget estimate).
