Do Goods and Services Tax Influence the Economic Development? An Empirical Analysis for India

Abstract

The Goods and Services Tax (GST) is implemented to ensure India’s balanced economic development by simplifying the country’s cumbersome indirect tax system, allowing commodities to move freely across state and national borders, cutting tax evasion and ramping up the taxpayers’ base, improving compliance with taxation rules, increasing government revenues and attracting investors by making it easier to do business in India. The purpose of our study is to determine if GST is achieving the objectives for which it was conceived. The panel regression estimations were used on data obtained from 31 states and union territories of India from 2017 to 2021, and the outcome shows that GST has a considerable positive effect on India’s economic development. The study suggests that authorities should review and change GST taxing regulations regularly.