An autonomous research institute under the Ministry of Finance


Revenue Implications of GST on Indian State Finances

Publication date

Jan, 2023


NIPFP Working Paper No 388


Sacchidananda Mukherjee


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.


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