Published Online:July 2026
Product Name:The IUP Journal of Applied Economics
Product Type:Article
Product Code:IJAE030326
DOI:10.71329/IUPJAE/2026.25.3.45-57
Author Name:Sarada Prasan Mohanty, Samir Ranjan Behera and Silu Muduli
Availability:YES
Subject/Domain:Economics
Download Format:PDF
Pages:45-57
This study examines the key determinants of goods and services tax (GST) collections across 17 Indian states from 2019 to 2025. The states are categorized into two clusters based on development indicators such as per capita income, infrastructure quality, and the degree of informality in their economies. The panel data regression analysis results indicate that both per capita income and financial development have a positive and significant impact on GST revenues, underscoring the scope for enhancing tax collection by raising income levels and strengthening credit absorption through financial development. In contrast, the levels of informality and road infrastructure exhibit limited or no statistically significant effect on GST performance.
Introduced in July 2017, the goods and services tax (GST) has turned out to be a landmark economic reform, helping to unify India’s complex indirect tax structure. The existence of multiple central as well as state taxes, prior to the introduction of GST, had generated a fragmented tax system, thereby creating cascading effects, apart from hindering the ease of doing business (Press Information Bureau [PIB], 2025).