Beyond the tax net: The real effects of GST on India’s fiscal landscape

Agrawal, Supriya; Kumar, Mohit; Agrawal, Pravin; Rastogi, Himanshu

doi:10.22059/jcountst.2026.412638.1469

Beyond the tax net: The real effects of GST on India’s fiscal landscape

Document Type : Review

Authors

Supriya Agrawal ¹

Mohit Kumar ²

Pravin Agrawal ²

Himanshu Rastogi ¹

¹ Amity Business School, Amity University Lucknow Camous, Uttar Pradesh, India.

² School of Business Management, Chhatrapati Shahu Ji Maharaj University, Kanpur, India.

10.22059/jcountst.2026.412638.1469

Abstract

The Goods and Services Tax (GST) in India, the major reform that happened in the country in 2017, replaced the multi-tiered indirect tax system with a unified national tax. This study evaluates GST’s impact on India’s fiscal structure by conducting exploratory empirical study analyzing data from 28 states and 4 union territories across pre-GST (2012–2017) and post-GST (2017–2024) periods. It’s a comparative GST assessment done by State-level comparative analysis by Cross sectional comparison Using paired t-tests, ANOVA, Chow tests, and multiple regression models, the study assesses changes in tax revenue, structural shifts, and macroeconomic effects. Results indicate significant increase in average collection of state tax revenues post-GST, affirming a positive fiscal impact. However, contrary to expectations, inter-state revenue volatility rose, indicating reduction in the fiscal stability of the country. Goods and Service Tax (GST) collections correlate with Gross Capital Formation (GCF) and Gross National Income (GNI), suggesting its role in investment-led growth. Nonetheless, the household consumption remains the largest contributor to national income. The study calls for ongoing reforms to promote equity, stability, and inclusive growth.

Keywords

fiscal reform

Goods and Services Tax (GST)

macroeconomic impact

revenue efficiency

state revenue

Subjects

Economics

موضوع: اقتصاد، مالیات و رشد مالی

حوزة موضوعی: هند

Main Object: Economics, Taxes and Fiscal Growth

Scope: India

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