UP Leads As Five Indian States Account For 50% Of Active GST Taxpayers, Says SBI

A recent report by SBI Research showed that only five states, Uttar Pradesh, Maharashtra, Gujarat, Tamil Nadu, and Karnataka, account for nearly 50% of the total GST taxpayers in India. It indicates that substantial attention is needed for tax regulations, along with potential for improvement in the rest of the Indian states.

“Top 5 states accounted for approx. 50 per cent of total Active GST Tax Payers” – SBI Research Report

As the Goods and Services Tax (GST) has completed eight years since its inception, this report has made a few observations clear. Uttar Pradesh is the leading state in GST taxpayer registration, contributing 13.2 per cent of all active GST taxpayers in the country. It is followed by Maharashtra at 12.1 per cent, Gujarat at 8.4 per cent, Tamil Nadu at 7.7 per cent, and Karnataka at 6.9 per cent.

While these states dominate in terms of taxpayer numbers, the report also made a key observation, It noted that some economically stronger states are underperforming in GST participation when compared to their share in the overall Gross State Domestic Product (GSDP).

GST Gap Reveals Untapped Potential in Southern States

These include Telangana, Tamil Nadu, Kerala, Andhra Pradesh, and Karnataka, which have a lower share of active GST taxpayers than their contribution to the national GSDP. This reflects a gap in formalisation and indicates untapped potential for GST expansion in these states.

The share in total GST registrations of Uttar Pradesh, Bihar, and Gujarat is higher than their share in GSDP. It further suggests a greater formalisation of the policy and enhanced tax compliance. For example, Bihar contributes 4.3 per cent of total GST taxpayers, despite having only a 2.8 per cent share in national GSDP.

Low GST Taxpayer Contribution from the Indian States

The report also highlighted that states like Uttarakhand, Chhattisgarh, Jammu & Kashmir, and Himachal Pradesh contribute very little to the total GST taxpayer base, with each accounting for 1.4 per cent or less.

The GST data shows that there is significant improvement in expanding the tax base; however, it also depicts a huge opportunity in an untapped market across states, especially in the wealthier and most industrialised states as well.

This insight will help in building future policies aimed at increasing the base, formulation of regulations, and boosting compliance across all regions.

(Inputs from ANI)

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