How the Pennies Drop

What GST revenue data tells us, and what it doesn’t




The introduction of a Goods and Services Tax (GST) in India in 2017 not only impacted the economy, but also altered the contours of fiscal federalism in India. Amongst other indicators, the steady growth of GST revenue has been a robust barometer of the success of the reform. This paper delves into the trends of GST collections to evaluate the efficacy of the reform to generate revenue. Subsequently, an attempt is made to answer the questions – what drives revenue growth, and are the collections, collection efficiencies, and buoyancy of collections better under GST as compared to the pre-GST period? This is done by examining GST collections while controlling for extraneous factors, such as inflation. Further, a novel mechanism for computing the collection rate of GST, using only publicly-available data is proposed. This has potential applications in revenue modelling, in analysis of trends across time and geographies, and for policy formulation. Rationalization of tax rates, structural efficiencies, widening of the tax base, and enhanced compliance are seen to contribute to the positive outcomes observed. In order to address the paucity of disaggregated data on enforcement in the public domain, the paper uses judicial data from District Level Courts to analyse spatial dimensions of GST enforcement. Overall, it is seen that GST has delivered on multiple fronts, including revenue growth, formalization of the economy, reduced rates of taxation, and creation of a more unified market. We also observe that post-GST tax buoyancy and collection efficiencies have shown significant improvement.


Public Finance, Tax System, Efficiency, Optimal Taxation, Evasion


Download data is not yet available.

Authors Bio

Bibek Debroy, Economic Advisory Council to the Prime Minister

Dr Bibek Debroy is Chairman, EAC-PM

Devi Prasad Misra, Central Board Of Indirect Taxes & Customs

Devi Prasad Misra is an officer of the Indian Revenue Service (Customs & Indirect Taxes) and is Director, Economic Advisory Council to the Prime Minister


Aizenman, Joshua, and Yothin Jinjarak. 2008. "The collection efficiency of the Value Added Tax: Theory and international evidence." The Journal of International Trade & Economic Development 17 (3 ): 391-410

The Empowered Committee Of State Finance Ministers. November 2009. "First Discussion Paper On Goods and Services Tax In India." New Delhi.

Ministry of Finance. 2023. Economic Survey 2022-23. New Delhi: Department of Economic Affairs.

MoSPI. n.d. Annual Estimates of GDP & Growth Rates- Constant Prices. Accessed November 24, 2023.

PIB. 2022. Provisional Estimates of Annual National Income, 2021-22 AND Quarterly Estimates of Gross Domestic Product for the Fourth Quarter (JAN-MAR), 2021-22. May 31. Accessed November 24, 2023.

Ministry of Finance. n.d. "GST Collections for August 2022 records increase of 28% y-o-y." Department of Revenue. Accessed November 24, 2023.

MoSPI. 2023. National Factsheet on Indian Economy. Accessed November 24, 2023.

Chandrasekhar, CP, and Jayati Ghosh. 2023. "GST collections: hype and reality." Hindu Business Line, May 15:

RBI. 2019. State Finances: A Study of Budgets 2019-20. RBI.

GST Council. 2023. GST System Statistics. Accessed November 24, 2023.

Ministry of Corporate Affairs. 2022. Annual Reports on the Working and Administration of the Companies Act, 2013. December. Accessed November 2023.

GST Council. 2019. "Agenda for 38th GST Council Meeting." GST Council Meetings. December 18. Accessed November 2023.

PIB. 2022. GST compensation to States for loss of revenue arising on account of implementation of GST for a period of five years. July 19. Accessed November 24, 2023.

—. 2023. Recommendations of 49th GST Council Meeting. February 18. Accessed November 24, 2023.

Laffer, Arthur. 2004. The Laffer Curve: Past, Present, and Future. The Heritage Foundation.

Gellman, Barton. 2009. Angler: The Cheney Vice Presidency. Penguin Books.

Miravete, Eugenio J., Katja Seim, and Jeff Thurk. 2018. "Market Power and the Laffer Curve." Econometrica 86 (5): 1651-1687

WTO. n.d. Technical Notes on Country Pages . Accessed November 2023.

Finance Commission India. 2020. "Report of Fifteenth Finance Commission for 2021-26." New Delhi.

GST Council. 2015. "Report on the Revenue Neutral Rate and Structure of Rates for the Goods and Services Tax (GST)."

Department of Revenue, Ministry of Finance. 2017. "Notification No.1/2017-Central Tax (Rate)." GST Council. June 28. Accessed November 24, 2023.

—. 2017. "Notification No.2/2017-Central Tax (Rate)." June 28. Accessed November 24, 2023.

GST Council. n.d. About Us. Accessed November 24, 2023.

Mukherjee, Sacchidananda. 2023. Revenue Performance Assessment of Indian GST. NIPFP Working Paper Series, NIPFP.

Keen, Michael. 2013. The Anatomy of the VAT. IMF Working Papers, IMF.

Ueda, Junji. 2017. The Evolution of Potential VAT Revenues and C-Efficiency in Advanced Economies. IMF Working Papers, IMF.

MoSPI. 2023. National Accounts Statistics 2023. Accessed November 2023.

Ministry of Finance. 2023. Components of GDP at Current Prices. Accessed November 24, 2023.

OECD. 2022. "Consumption Tax Trends 2022." November 30. Accessed November 2023.

GST. n.d. About Form GSTR-3B. Accessed November 2023.

—. n.d. GST Statistics. Accessed November 2023.

Agarwal, Sumit, Shashwat Alok, Shiv Dixit, and Tejaswi Velayudhan. 2022. "Impact of the GST on Corporate Tax Evasion: Evidence from Indian Tax Records." 17th Annual Conference on Economic Growth and Development. New Delhi: Indian Statistical Institute.

Lok Sabha . 2023. "Unstarred question No. 1957 on GST Related Offences ." March 13.

Lok Sabha. 2018. "Unstarred Question on "Tax Evasion by Corporates" No. 4043 ." August 10.

Ministry of Finance. 2023. Receipt Budget. Budget Division.

ECourts Services. n.d. E-Courts: About Us. Accessed November 24, 2023.

Comptroller and Auditor General of India. 2022. Report No.5 of 2022- Compliance Audit Report on Indirect Taxes - Goods and Services Tax, Union Government Department of Revenue (Indirect Taxes – Goods and Services Tax). CAG Audit Reports, CAG.

The Committee of Officers on GST Audits. 2023. "Model All India GST Audit Manual."

Debroy, Bibek, and Devi Prasad Misra. 2023. "India on the Move: An examination of the volume and direction of internal trade in India." Indian Public Policy Review (The Takshashila Institution) 4 (2): 01-26