Assessment of the Goods and Services Tax (GST) and its Contribution to India’s Economic Development

Abstract

The introduction of the Goods and Services Tax (GST) in India in July 2017 marked one of the most significant tax reforms in the country’s economic history. Designed as a comprehensive indirect tax system, GST replaced multiple cascading taxes levied by both central and state governments, thereby creating a unified national market. The reform aimed to enhance tax efficiency, improve compliance, reduce tax evasion, and promote economic growth through streamlined taxation. By subsuming various indirect taxes such as VAT, excise duty, and service tax, GST sought to eliminate inefficiencies associated with the previous tax regime and establish a more transparent and robust fiscal framework. The present study assesses the impact of GST on India’s economic development during the period 2017–2019 using a qualitative and analytical approach. The research focuses on key indicators such as tax revenue trends, ease of doing business, inflation, and economic growth. Data have been collected from government reports, GST Council publications, and World Bank databases. The findings indicate that GST has contributed to improving tax compliance, enhancing revenue mobilization, and promoting formalization of the economy. However, challenges such as implementation issues, compliance burden, and short-term disruptions have also been observed. The study concludes that while GST has significant long-term potential to support economic development, continuous reforms and policy adjustments are necessary to maximize its benefits.