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Revenue Implications of GST on Indian State Finances

Author

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  • Mukherjee, Sacchidananda

    (National Institute of Public Finance and Policy)

Abstract

Assessing the revenue implications of GST on Indian state finances cannot be contained to compare the revenue stream which is subsumed into GST with State GST collection alone. Since GST subsumes many taxes from state tax bases, comparing the revenue performance of taxes which are outside the GST framework would be equally important. Moreover, in federal system revenue implication of shortfall in tax collection of the federal government is also likely to spill-over to sub-national finance in terms of lower tax devolution. Sustaining revenue streams of state governments is important for sustainable Public Finance Management (PFM) and therefore a comprehensive assessment of state finances before and after GST would be important. This paper attempts to fill the gap in exiting literature by assessing the revenue of 18 major states during pre- and post-GST periods.

Suggested Citation

  • Mukherjee, Sacchidananda, 2023. "Revenue Implications of GST on Indian State Finances," Working Papers 23/388, National Institute of Public Finance and Policy.
    • Handle: RePEc:npf:wpaper:23/388
    Note: Working Paper 388, 2023
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    File URL: https://www.nipfp.org.in/media/medialibrary/2023/01/WP_388_2023.pdf
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    References listed on IDEAS

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    1. Mukherjee, Sacchidananda, 2019. "State of Public Finance and Fiscal Management in India during 2001-16," Working Papers 19/265, National Institute of Public Finance and Policy.
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    Cited by:

    1. Yadav, Jitesh & Chakraborty, Lekha, 2023. "Public Financial Management and Crime Against Children: A State level Analysis in India," Working Papers 23/391, National Institute of Public Finance and Policy.

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    More about this item

    Keywords

    Revenue assessment ; Goods and Services Tax (GST) ; State Finances ; Revenue protection ; GST Compensation ; 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

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