IDEAS home Printed from https://ideas.repec.org/p/npf/wpaper/23-392.html
   My bibliography  Save this paper

Revenue Performance Assessment of Indian GST

Author

Listed:
  • Mukherjee, Sacchidananda

    (National Institute of Public Finance and Policy)

Abstract

By comparing comparable revenue streams of pre- and post-GST periods, in this paper we assess the revenue performance of GST in India for the period 2012-13 to 2022-23. Sustaining revenue streams of the Union and State governments (in terms of percentage share in nominal Gross Domestic Product or GDP) between the pre- and a post-GST period is important for sustainable Public Finance Management. We observe that post-GST tax buoyancy in the GST regime has improved for the Union government as well as in overall GST collection. However, average tax buoyancy of State portion of GST has not improved yet. GST-to-GDP ratio of the Union as well as state governments not yet improved during post-GST period as compared to equivalent share of respective revenue streams in GDP during the pre-GST period. Based on available information, we estimate C-efficiency ratio (or collection efficiency), Effective Tax Rates, Compliance Gap and Policy Gap of GST for the period Q2:2017-18 to Q3:2022-23. We find that average C-efficiency of GST is 0.54 (or 54 %) which is in line with available evidences from developing Asian countries. Average ETR has gone up from 10.91 per cent in 2020-21 to 12.21 per cent in 2021-22 and 12.56 per cent upto Q3:2022-23 of 2022-23. The share of policy gap in C-efficiency is higher than compliance gap which is in line with available evidences from EU and OECD countries.

Suggested Citation

  • Mukherjee, Sacchidananda, 2023. "Revenue Performance Assessment of Indian GST," Working Papers 23/392, National Institute of Public Finance and Policy.
    • Handle: RePEc:npf:wpaper:23/392
    Note: Working Paper 392, 2023
    as

    Download full text from publisher

    File URL: https://www.nipfp.org.in/media/medialibrary/2023/04/WP_392_2023.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Sacchidananda Mukherjee, 2020. "Goods and Services Tax efficiency across Indian States: panel stochastic frontier analysis," Indian Economic Review, Springer, vol. 55(2), pages 225-251, December.
    2. Mukherjee, Sacchidananda, 2021. "Revenue Implications of GST Rates Restructuring in India: An Analysis," Working Papers 21/358, National Institute of Public Finance and Policy.
    3. Mukherjee, Sacchidananda, 2020. "Performance Assessment of Indian GST: State-level Analysis of Compliance Gap and Revenue Growth," Working Papers 20/301, National Institute of Public Finance and Policy.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tanzi, Vito, 2021. "Economic Theory Versus Economic Reality: Dealing with Pandemics and Other Global Public Goods and Bads," Working Papers 21/360, National Institute of Public Finance and Policy.
    2. Chakraborty, Lekha S. & Thomas, Emmanuel & Gandhi, Piyush, 2020. "Natural Resources Revenue Buoyancy in India: Empirical Evidence From State-specific Mining Regime," Working Papers 20/313, National Institute of Public Finance and Policy.
    3. Chakraborty, Lekha & Thomas, Emmanuel, 2020. "COVID-19 and Macroeconomic Uncertainty: Fiscal and Monetary Policy Response," Working Papers 20/302, National Institute of Public Finance and Policy.
    4. Jena, Pratap Ranjan & Singh, Abhishek, 2020. "Emerging Fiscal Priorities and Resource Concerns: A Perspective on Fiscal Management from Madhya Pradesh," Working Papers 20/303, National Institute of Public Finance and Policy.
    5. Honey Karun & Hrishikesh Vinod & Chakraborty, Lekha S., 2020. "Did public investment crowd out private investment in India?," Working Papers 20/312, National Institute of Public Finance and Policy.
    6. Mukherjee, Sacchidananda, 2021. "Revenue Shortfall and GST Compensation: An Assessment," Working Papers 21/356, National Institute of Public Finance and Policy.
    7. Mukherjee, Sacchidananda, 2023. "Distributional Impact of Indian GST," Working Papers 23/403, National Institute of Public Finance and Policy.
    8. Rangan, Divy & Chakraborty, Lekha, 2020. "COVID-19: Global Diagnosis and Future Policy Perspective," Working Papers 20/304, National Institute of Public Finance and Policy.
    9. Pandey, Rita & Gupta, Manish & Sachdeva, Paavani & Singh, Abhishek, 2020. "Biodiversity Conservation in India: Mapping Key Sources and Quantum of Funds," Working Papers 20/311, National Institute of Public Finance and Policy.

    More about this item

    Keywords

    Revenue performance assessment ; Goods and Services Tax (GST) ; C-efficiency ; Compliance Gap ; Policy Gap ; Effective Tax Rate (ETR) ; India;
    All these keywords.

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:npf:wpaper:23/392. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: S.Siva Chidambaram (email available below). General contact details of provider: http://www.nipfp.org.in .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.