Impact of the GST revenue collection on the Indian Economy
The GST revenue collection has a deep impact on the Indian economy as the tax collected via GST is the main driver of the Indian economy.
- As the revenue collection of the government increases, the government starts spending more money on development works and launching new public welfare policies, that benefit both the netizens as well as the economy.
- The GST is a single taxation system that retards tax evasion and thus increases the governmentâs revenue.
- As the government doesnât charge dozens of different taxes on the supply or purchase of any goods and services, it makes it easier for foreign investors to invest in such economies.
- The GST brings transparency to the taxation system thus promoting ease of doing business, which leads to an increase in the gross domestic product (GDP) of India.
GST Revenue Collection
Soon after introducing GST (Goods and service tax) in 2017, the major revenue collections observed a considerable hike, and the main reason behind it is that the centralization of all taxes made tax evasion difficult and bring in transparency to the Indian taxation system. Before the launch of GST, many taxes with different rates use to apply to different goods and services. Also, it has been observed that many sellers used to charge hidden taxes on certain goods and services. Thus GST proved to be a game-changing initiative by the central government resolving all the discrepancy in the taxation system.
The GST revenue collection for the month of May 2022 was around INR 1,02,485 Crores, which observed an overall increase of 40% from May 2021, when the GST revenue collection was INR 70,951 Crores.
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