Impact of Goods and Services Tax on Indirect Tax Revenue of India: With Special Reference to Odisha State

Dey, Sanjeeb Kumar

doi:10.13189/ujaf.2021.090318

Cited by 7 publications

(5 citation statements)

References 14 publications

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“…Mukherjee (2020) found in their study that the adoption of the GST in India has reduced the GST capacity of the Indian states. Similarly, Dey (2021) also found that the Indian states are unable to generate sufficient revenue under the GST regime and will face difficulties in revenue generation in case of the termination of GST compensation to states by the central government in the near future. Nayaka and Panduranga (2020) also revealed that although the registrations, filing of GST returns and tax collections of the Karnataka state are increasing rapidly after the GST adoption, but the release of the compensation cess by the central government is constantly delayed.…”

Section: Resultsmentioning

confidence: 97%

“…The comparative result affirms (refer Table 1) that after the adoption of GST in India, the efficiency ratio of the Indian states has reduced drastically. Dey (2021) found that Indian states are unable to generate sufficient revenue as per the expectations under the GST regime and will face difficulties in case of the abolishment of GST compensation to states by the central government in near future.…”

Section: Resultsmentioning

confidence: 99%

“…Moreover, the study has used the dummy variable for the introduction of GST in India to study the impact of this taxation reform on the tax revenue efficiency of the state governments in India which is the primary objective of the study. The expected symbol of GST Dummy is negative on the basis of studies conducted by Chakravarty and Dehejia (2017), Mukherjee (2020), Nayaka and Panduranga (2020) and Dey (2021). The relationship between the variables of the study is explicated below with the expected symbol of the variables:…”

Section: Research Objective and Methodologymentioning

confidence: 99%

“…Ðord evi c et al (2019) found in their study that the VAT collection efficiency is sensitive to prevailing VAT rates in a country, and an increase in VAT rate negatively impacts the VAT C-efficiency ratio. Similarly, Dey (2021) found that although GST revenue in India is showing an increasing trend, but states are unable to generate revenue as per the expectations under the GST regime and will face difficulties in case of the abolishment of GST compensation to states in near future. Mukherjee (2020) found that the adoption of the GST in India has reduced the GST capacity of the Indian states; however, the impact is found to be restricted to scale only.…”

Section: Literature Reviewmentioning

confidence: 99%

See 3 more Smart Citations

Goods and Service Tax and its implications on revenue efficiency of sub-national governments in India: an empirical analysis

Garg

Priyanka

Narwal

et al. 2023

AJB

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PurposeThe purpose of the current study is to examine the implications of the implementation of Goods and Service Tax (GST) on the revenue efficiency of the sub-national governments in India. Furthermore, the study aims to compare the revenue efficiency of the Indian states for the pre-GST and post-GST periods in India.Design/methodology/approachThe study has used the annual revenue of value-added tax (VAT)/GST of the Indian states for the period ranging from 2012–2013 to 2020–2021 for the pre- and post-GST periods. The empirical results are based on the panel regression model for examining the implications of GST adoption on the Indian states.FindingsThe analysis shows that the implementation of GST in India has negatively impacted the revenue efficiency of the Indian states. Moreover, the results affirm that the contribution of the service sector to the state's Net State Domestic Product (NSDP), credit-deposit ratio (CDR) and outstanding net bank credit (ONBC) ratio of schedule commercial banks (SCBs) positively and states' dependency on central transfers (DCT) negatively impact the tax revenue efforts of the state governments. Furthermore, the GST adoption has a greater impact on the revenue efficiency of the minor states in comparison to major states which may widen the inter-state disparity gap as GST revenue constitutes a major share in the Own Tax Revenue (OTR) of the Indian states in aggregate.Practical implicationsThe current study will act as a guide for government, policymakers and for the sitting of the fifteenth finance commission in India for future policy formulation on GST and compensation to the Indian states. Similarly, this study can be used as a base for conducting future studies on the implications of GST at the national, sub-national, and international levels.Originality/valuePrevious studies on the implications of GST are theoretical and conceptual. There is hardly any study at the national or sub-national level that has focused on the implications of GST on the revenue efficiency of the Indian states.

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Section: Resultsmentioning

confidence: 97%

Section: Resultsmentioning

confidence: 99%

Section: Research Objective and Methodologymentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

See 2 more Smart Citations

Goods and Service Tax and its implications on revenue efficiency of sub-national governments in India: an empirical analysis

Garg

Priyanka

Narwal

et al. 2023

AJB

View full text Add to dashboard Cite

show abstract

“…Permadi & Wijaya (2022) in their research revealed that the service sector is a sector with high productivity, which can be seen from its relatively largest contribution compared to other sectors in Gross Domestic Revenue (GDP). More specifically, a study provides results that the imposition of taxes on the consumption of goods and services makes a significant contribution to increasing tax revenue, especially indirect taxes (Dey, 2021).…”

Section: Introductionmentioning

confidence: 99%

Moderation Of Trade Openness On The Effect Of Service Sector And Inflation On Indirect Tax Revenue

Harlan

2024

Educoretax

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This study aims to analyze the effect of service sector, inflation, and trade openness on indirect tax revenue in a number of countries in Latin America and the Caribbean. The results of this study are expected to provide additional insight into the knowledge of the factors that influence indirect tax revenue as well as the moderating effect of trade openness on the influence of the service sector and inflation in influencing indirect tax revenue in the region. This study uses secondary data on 15 countries with a period of 2009-2019. The analysis model used is multiple linear regression for panel data with panel-corrected standard errors. The results show that there is a significant effect of all independent and moderation variables on indirect tax revenue. Individually, the service sector has a negative effect on indirect tax revenue. However, after being moderated, the effect is weakened. Inflation also negatively affects indirect tax revenue, but this effect cannot be moderated by trade openness. Meanwhile, trade openness partially has a positive effect on indirect tax revenue. It is recommended that the government make policies that encourage trade openness because it has a positive impact on the economy, especially in the field of taxation.

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Building the Empirical Puzzle on Impact of Macroeconomic Determinants on GST Revenue: An Empirical Investigation via ARDL Bound Test Perspective

Garg,

Narwal,

Kumar

2024

Journal of Public Affairs

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The revenue mobilization remains a challenge for many countries, especially developing countries such as India. Therefore, this study explores the macroeconomic determinants of Goods and Service Tax (GST) revenue of the government in India as GST constitutes a major share in the Own Tax Revenue (OTR) of the government in India. The current study has employed the Auto Regressive Distributed Lag (ARDL) model to examine the macroeconomic determinants of GST taxation revenue of the government in India. The results reveal that foreign direct investment, depreciation in the exchange rate and foreign exchange reserves have a favorable impact on the GST revenue of the government in India. Furthermore, the gross fiscal deficits of the government and inflation have a detrimental effect on the GST revenue collection of the government in India. The results of the study are supported by the Tanzi effect and the Tanzi–Olivera effect for the detrimental effect of inflation and gross fiscal deficit on the GST revenue of the government in India. The current study has major policy implications for the government, policymakers, and researchers. The empirical results illustrates that the government may put a stringent check on inflation and gross fiscal deficit of the country to improve their GST collections. Moreover, the government should try to focus on foreign direct investment, trade openness, and foreign exchange reserve in India to increase their GST revenue. Meanwhile, the current study can be used as a base for conducting future studies at national and international levels for examining the determinants of other taxation revenue of the government by incorporating other country specific variables. This study may act as a novel contribution to the available literature on the macroeconomic determinants of taxation revenue in India. To the knowledge, it will be the first study in India to especially explore the determinants of GST revenue of the government in India. However, the findings of the study need to be generalize in future by incorporating a larger sample size as GST is still in its introductory phase in India.

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Impact of Goods and Services Tax on Indirect Tax Revenue of India: With Special Reference to Odisha State

Cited by 7 publications

References 14 publications

Goods and Service Tax and its implications on revenue efficiency of sub-national governments in India: an empirical analysis

Goods and Service Tax and its implications on revenue efficiency of sub-national governments in India: an empirical analysis

Moderation Of Trade Openness On The Effect Of Service Sector And Inflation On Indirect Tax Revenue

Building the Empirical Puzzle on Impact of Macroeconomic Determinants on GST Revenue: An Empirical Investigation via ARDL Bound Test Perspective

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