Daijiworld Media Network- New Delhi

New Delhi, Jul 22: As India marks eight years of Goods and Services Tax (GST) implementation, a report released by SBI Research has revealed that just five states contribute nearly 50% of the country’s active GST taxpayers, highlighting both progress and potential gaps in the system’s reach across the nation.

The top five states in terms of active GST taxpayer registrations are:

• Uttar Pradesh – 13.2%

• Maharashtra – 12.1%

• Gujarat – 8.4%

• Tamil Nadu – 7.7%

• Karnataka – 6.9%

These five states combined account for almost half of India’s active GST taxpayer base, signalling a high concentration of tax registration activity in a select few states.

The report further noted a disconnect between economic output and GST participation in several industrially advanced states. States like Telangana, Tamil Nadu, Kerala, Andhra Pradesh, and Karnataka have lower GST registration figures when compared to their share in the national Gross State Domestic Product (GSDP). This indicates a gap in formalisation and suggests untapped tax potential in these economically strong regions.

In contrast, states like Uttar Pradesh, Bihar, and Gujarat show a positive deviation, with their share in GST registrations outpacing their GSDP share. For instance, Bihar contributes 4.3% of GST taxpayers, despite only accounting for 2.8% of the national GSDP, highlighting notable strides in tax compliance and formalisation.

The report also pointed out that smaller states and UTs like Uttarakhand, Chhattisgarh, Jammu & Kashmir, and Himachal Pradesh have minimal representation in the GST taxpayer base, each contributing 1.4% or less.

As GST completes eight years of implementation, the report underscores the need for targeted policy efforts to expand the tax net, particularly in underperforming yet economically significant states. This insight is expected to guide future reforms aimed at enhancing tax base formalisation and ensuring a more balanced GST ecosystem across India.