Published Online:April 2025
Product Name:The IUP Journal of Accounting Research & Audit Practices
Product Type:Article
Product Code:IJARAP030425
DOI:10.71329/IUPJARAP/2025.24.2.77-89
Author Name:Durga Singh Gour and Mukesh Kumar
Availability:YES
Subject/Domain:Finance
Download Format:PDF
Pages:77-89
Goods and Services Tax (GST)—implemented in India with the intention of improving revenue efficiency and simplifying tax administration—represented a substantial change in the indirect tax system. This study assesses the cost-benefit aspects of GST implementation in India by examining the GST-to-GDP ratio, administrative expenses, and overall GST revenue collection. Based on the secondary data from 2010-11 to 2023-24, obtained from government reports, RBI bulletins, and GST Council publications, the study employs principal component analysis (PCA) to identify the key determinants influencing GST revenue. Subsequently, the difference-in-differences (DID) technique is used to analyze the structural impact of GST over time, followed by paired sample t-statistical tests to verify the significance of observed differences between the pre- and post-GST periods. The findings indicate a substantial increase in GST income and the tax-to-GDP ratio post adoption, demonstrating improved tax collection efficiency. However, rising administrative expenses highlight the need for policy adjustments. Despite higher operational costs, statistical tests confirm the effectiveness of GST in enhancing revenue. The study concludes that GST has strengthened India’s taxation system, leading to higher revenue mobilization and economic efficiency, but further policy optimization is necessary to manage increasing administrative costs and sustain long-term benefits. These findings provide empirical insights for policymakers and researchers in evaluating the fiscal impact of GST.
In a major move toward establishing a single tax system for the nation, India introduced the goods and services tax (GST) on July 1, 2017. A complicated and disjointed indirect tax system including several levies imposed by the federal and state governments existed in India prior to its implementation.