50% of India's GST Comes from 5 States; UP Alone Contributes Over 13%

A new report by SBI highlights that just 5 states account for close to 50% of India's active GST taxpayers. Uttar Pradesh leads the pack with the highest registration share, indicating a concentration of tax compliance in specific regions while highlighting scope for improvement elsewhere.

Top 5 GST-Contributing States 

According to the data, Uttar Pradesh contributes 13.2% of active GST taxpayers, followed by Maharashtra at 12.1%, Gujarat at 8.4%, Tamil Nadu at 7.7%, and Karnataka at 6.9%. These 5 states together constitute nearly half of the total taxpayer base under the Goods and Services Tax, 8 years after its rollout. This dominance shows a regional consolidation of economic formalisation and tax participation.

Mismatch Between GSDP and GST Participation

The report points out a notable discrepancy where some economically robust states like Telangana, Kerala, Tamil Nadu, Andhra Pradesh, and Karnataka underperform in GST participation when compared with their Gross State Domestic Product (GSDP) share. This suggests untapped potential and a lower rate of formalisation in these areas despite their strong economic output.

Read More: PMO Clears Proposal for GST Framework Revamp; All Eyes on Upcoming Council Meet!

Uttar Pradesh and Bihar Show Formalisation Strength

States like Uttar Pradesh, Bihar, and Gujarat show an opposite trend, with their share in total active GST registrations exceeding their GSDP contribution. For instance, Bihar accounts for 4.3% of registered taxpayers despite holding only a 2.8% share in GSDP. This implies stronger tax network outreach and compliance in less economically dominant regions.

States with Minimal GST Tax Base

On the other hand, states including Uttarakhand, Chhattisgarh, Jammu & Kashmir, and Himachal Pradesh each contribute no more than 1.4% to the national GST database. These figures highlight regional disparities in tax formalisation, suggesting that policy efforts could target these areas for improved compliance.

Conclusion

The latest SBI report illustrates that a handful of states dominate India's GST taxpayer base, with Uttar Pradesh emerging as the leader. However, the data also uncovers significant gaps in high-GSDP states, offering direction for future policy focus on boosting tax awareness and compliance where it's lagging.

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