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SBI Report Reveals Uneven GST Participation Across Indian States; Details Inside

"Top 5 states accounted for approx. 50 per cent of total Active GST Tax Payers," the report stated, naming Uttar Pradesh, Maharashtra, Gujarat, Tamil Nadu, and Karnataka as the leading contributors

As India marks eight years since the rollout of the Goods and Services Tax (GST), a new report by SBI Research reveals a notable trend in tax registration patterns across the country. According to the report, just five states are home to nearly 50 per cent of the total active GST taxpayers in India, signaling a significant regional concentration and the need for broader inclusion in the tax net.

"Top 5 states accounted for approx. 50 per cent of total Active GST Tax Payers," the report stated, naming Uttar Pradesh, Maharashtra, Gujarat, Tamil Nadu, and Karnataka as the leading contributors.

Uttar Pradesh Tops, Maharashtra Close Behind

Uttar Pradesh leads the list with 13.2% of the nation’s active GST taxpayers, followed by Maharashtra at 12.1%. Gujarat accounts for 8.4%, Tamil Nadu 7.7%, and Karnataka 6.9%. This data indicates that these states serve as key hubs for tax compliance and economic formalisation.

While the top five states dominate in registration numbers, the report also draws attention to a misalignment in some economically advanced states. Telangana, Tamil Nadu, Kerala, Andhra Pradesh, and Karnataka have a lower proportion of GST taxpayers relative to their contributions to Gross State Domestic Product (GSDP). This suggests that formalisation in these regions has room to grow.

In contrast, states like Uttar Pradesh, Bihar, and Gujarat show a more positive trend. For instance, Bihar accounts for 4.3 per cent of total GST registrations, despite representing only 2.8 per cent of the national GSDP, a sign of stronger formalisation and tax compliance.

Also Read: IMF's Gita Gopinath To Step Down In August, Plans To Return To Harvard

Low Contribution From Several Smaller States

The report further noted that states such as Uttarakhand, Chhattisgarh, Jammu & Kashmir, and Himachal Pradesh each contribute 1.4 per cent or less to the overall GST taxpayer base, indicating limited penetration of the tax regime in these regions.

The findings underscore that while GST has achieved considerable reach since its introduction, significant untapped potential remains, particularly in wealthier and industrialised states. 

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