What makes GST a destination-based tax? Goa CM Pramod Sawant explains in state assembly

Goa chief minister Pramod Sawant’s latest revelation has brought to light a peculiar nature of the Goods and Services Tax (GST). Sawant, who also holds the finance portfolio, revealed that Goa did not incur any losses in GST revenue because companies route sales and billing using corporate offices outside the state.

Goa is more than a tourist state; it is a manufacturing hub. Some of the major industries in the state include pharmaceutical manufacturing, food processing, iron and steel production, shipbuilding, cement manufacturing, electrical machinery production, and leather processing.

In fact, Goa collected ₹551 crore in gross GST revenues during June 2025, posting a 1 per cent year-on-year growth. As of June-end, central tax authorities collected GST from 18,375 GSTINs while the state tax authorities collected GST from 28,497 GSTINs.

The Goa CM’s latest comments revealed that the GST regime, which was rolled out from July 1 2017, was a consumption-based tax system. This meant the GST was collected at the destination of sales, and not the point of origin or manufacturing.

The tax on goods and services is accrued to the state or union territory where they are consumed, clarified Sawant.

The state CM was responding to Maharashtrawadi Gomantak Party MLA Jit Arolkar in the Goa assembly, after he inquired if the government is aware of GST revenue losses due to companies routing sales and billing through corporate offices located outside the state. In the first session of the Goa assembly’s monsoon session, Arolkar alleged that certain firms were declaring ‘point of sale’ outside the state despite the manufacturing in Goa.

There is no question of revenue loss, as Goa receives GST on all goods and services consumed within Goa, irrespective of their origin or manufacturing state, Sawant explained.

According to the Union Revenue Department, GST is a “destination-based tax.”

“This implies that all SGST collected will ordinarily accrue to the State where the consumer of the goods or services sold resides,” the department’s concept note on GST reads.

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