Abstract

The Goods and Services Tax (GST), implemented in India in 2017, represents a landmark reform aimed at simplifying the nation’s indirect tax structure. This study takes a critical look at the regional and sectoral differences in the implementation of the Goods and Services Tax (GST), focusing on the economic, budgetary, and administrative consequences of these differences. This research, which is based only on secondary data, demonstrates how industrialized states such as Maharashtra and Gujarat have reaped disproportionate benefits as a result of their solid infrastructure and huge manufacturing bases. On the other hand, states that place a significant emphasis on agriculture, such as Uttar Pradesh and Bihar, have encountered difficulties as a result of a limited diversification of their revenue bases and an inadequate digital infrastructure. Analysis of the sector finds that while the manufacturing and logistics industries have benefited from the Goods and Services Tax (GST) to simplify their operations, small and medium companies (SMEs) and the informal sector have suffered with the expenses of compliance and the complexity of regulatory requirements. The article also investigates the role that technology plays in enhancing tax compliance, highlighting both the achievements that technology has had in decreasing tax evasion as well as the ongoing difficulties that small enterprises in rural regions continue to face. Additionally, it investigates the consequences of revenue, which includes the early deficits and ultimate stabilization in the collections of GST, while simultaneously finding gaps in the equitable distribution of money between the central government and the provincial governments. The findings highlight the necessity of targeted changes, such as upgrades to infrastructure, streamlined compliance processes, and improved assistance for areas and sectors that are not functioning as well as they could. The objective of this study is to shed light on the development of the Goods and Services Tax (GST) as a fiscal instrument and to investigate the potential of the GST to generate inclusive economic growth in India.