Revenue Performance of Goods and Services Tax (Gst) In India: An Analysis

Abstract

Indian indirect tax system marked a transformative reform in the year 2017 with the introduction of Goods and Service Tax (GST) in India. It subsumed several central and state taxes into a unified tax with the aim of improving compliance, eliminating cascading effect, enhancing revenue efficiency and creating a unified national market. The present study examines the revenue performance of GST by analysing growth rate, buoyancy and state-wise collection from the tax. The responsiveness of GST revenue to the change in GDP is known as tax buoyancy, it evaluates the efficiency of tax collection relative to statutory tax rates and economic output. Secondary time-series data on GST used to the study growth rate and tax-GDP ratio assessment. Despite temporary decline in the GST revenue during COVID-19 pandemic GST revenue has a long term upward trend. Buoyancy of the tax indicates faster growth than the GDP which indicates improved responsiveness of the tax system. Economically developed states account for a disproportionately big percentage of the nation's GST revenue, according to the data, which also shows significant interstate inequalities in GST collecting. These results emphasize how crucial it is to improve tax administration, broaden the tax base, boost compliance, and lessen regional disparities in order to increase GST's contribution to fiscal sustainability.