New Delhi: State tax collections have not been hit by demonetisation , data shared with the Centre show, providing fire power to the Narendra Modi government battling charges of slowing down of the economy because of phasing out of Rs 500 and Rs 1,000 notes.Seventeen of the 31 states and Union territories have shared the numbers for December and only three – West Bengal, Meghalaya and Arunachal Pradesh – have reported a decline. In November too, three of the 23 states saw a decline in VAT collections and the trend is similar for central sales tax.West Bengal, which has been complaining about a decline in revenue , saw its VAT collections jump 10.75% in November, although the mop-up dipped to 8% in December. The situation was similar in Meghalaya, while Arunachal Pradesh saw a decline in both the months.The Centre is maintaining that its revenues have not been hit. Last week, fnance mnister Arun Jaitley said direct and indirect tax collections will exceed the budget target.For most states, the growth in VAT collections had slowed in December, compared to November when Modi announced the decision to withdraw the two high-denomination notes that accounted for 86% of the total stock of currency in circulation.This may be attributed to the scarcity of cash in the initial days of December besides some of the spending and purchases taking place before Modi’s announcement on November 8 evening.In addition, some people rushed to use the demonetised currency in the early days of November since they remained valid for some transactions. With cash supply improving in recent weeks, the government expects a pick-up in sales. The increase in oil prices may also be responsible for a part of the gain in VAT collections.The Centre has been under pressure amid claims that economic activity has slowed down significantly post-demonetisation. Advance estimates of GDP released by the CSO on Friday projected that the economy would grow 7.1% this year, the slowest pace of expansion in three years.The estimate does not factor in the impact of demonetisation but most private economists have projected lower growth rate for the current financial year.Apart from own revenue raised through VAT and other taxes, states get 42.5% of the Centre’s revenue.The numbers show that J&K has seen a sharp increase in both the months, with Maharashtra topping the list among the bigger states. Delhi, Gujarat and Telangana are among those which have not shared the data.