Gross tax revenue
Also called: GTR, Gross central tax revenue · Topic: Fiscal Federalism: Finance Commission, Devolution and Centre-State Finances · NCERT: Beyond NCERT
Meaning
Gross tax revenue (GTR) is the total tax money the Union government collects in a year, before it gives anything away. It includes every central tax: income tax, corporation tax, customs, excise, the Centre's GST, and also cesses and surcharges. Cesses are extra taxes kept for a named purpose. Surcharges are a tax added on top of a tax. GTR matters because it is the starting point for working out how much money goes to the states. The part that is shared with states is the divisible pool:
Divisible pool = Gross tax revenue − cesses − surcharges − cost of collection (and taxes of Union Territories).
Example
The Finance Commission gives states 41% of the divisible pool. This was the 15th FC's share, and the 16th FC kept it for 2026-31. But cesses and surcharges are not shared. At their 2020-22 peak they made up about 18-20% of GTR. So in recent years states have got only about 30-32% of the Centre's gross tax revenue, well below the headline 41%.
Don't confuse with
- Divisible pool: this is only the shareable part of GTR. It leaves out cesses, surcharges and the cost of collection, so it is always smaller than GTR.
- Net tax revenue: this is what the Union keeps after paying the states their share. GTR is counted before that payment.