Exploring Trends and Disparities in Goods and Services Tax (GST) Revenue Growth: An In-Depth Analysis of State-Level Data in India

Abstract

The introduction of the Goods and Services Tax (GST) in India on July 1, 2017, marked a pivotal shift in the country’s indirect tax framework, aiming to establish a unified market and enhance tax compliance standards. The ramifications of GST implementation have resonated throughout India, encompassing significant changes such as the consolidation of various indirect taxes, increased tax revenues, and the challenges associated with aligning tax rates and exemptions. The successful execution of GST necessitates ongoing collaboration and adaptability among stakeholders, including state authorities, businesses, and tax bodies. This study delves into an in-depth analysis of the GST landscape in India, focusing on variations in GST revenue aggregation and examining the state-specific growth patterns of GST revenue across the nation. Utilizing secondary data sources spanning from 2017-18 to 2023-24 sourced from the GST portal and the Reserve Bank of India, the research employs descriptive statistical methods to scrutinize the trajectory and evolution of GST revenue collections in the Indian fiscal realm. The empirical analysis reveals a compelling narrative of GST collections, escalating from 483,730 crores in 2017-18 to a substantial 1,390,610 crores in 2023-24, representing a remarkable growth of approximately 187%. This upward trend signifies the improving efficacy of the GST system, enhanced compliance, and increased economic activities contributing to the tax base. The consistency in annual growth rates underscores the resilience of GST revenue metrics, with states boasting vibrant industrial sectors showcasing the most significant escalations. Despite a decline in GST collections in 2020-21 due to the COVID-19-induced economic slowdown, subsequent years showcased a strong recovery. The analysis highlights the correlation between a state’s economic development and its GST revenue, with states like Maharashtra, Gujarat, Karnataka, Tamil Nadu, and Delhi consistently leading in GST collections. The disparities in growth rates among states underscore the diverse economic landscapes in the country, depicting challenges and opportunities for enhancing revenue generation and economic growth.