International Journal For Multidisciplinary Research

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Goods and Services Tax in Uttar Pradesh: Fiscal Transformation, Revenue Performance, and Sustainability Within India's Evolving Tax Federalism

Author(s) Mr. Jeetendra Pal, Dr. Vivek Kumar Singh
Country India
Abstract The introduction of Goods and Services Tax (GST) on 1 July 2017 marked a major shift in India’s indirect tax system. Before GST, businesses faced a confusing mix of central taxes (like excise duty and service tax) and state levies (VAT, entry tax, octroi, and various cesses). These overlapping taxes caused cascading costs, border delays, and administrative headaches, ultimately raising prices for everyone.
GST replaced this fragmented setup with a single, destination-based consumption tax that applies uniformly across the country. The goal was simpler compliance, reduced cascading, and a truly integrated national market.
A standout feature is the GST Council, where the Centre and states jointly decide rates, exemptions, and rules. This cooperative approach has strengthened federal coordination in taxation.
Since rollout, GST has brought greater transparency and efficiency. The GST Network (GSTN) enables online filings, invoice matching, and better tracking, pulling many informal businesses into the formal economy. Removing state border checkpoints has sped up goods movement and lowered logistics costs.
Revenue trends have been encouraging overall. Using principles from public finance theory alongside empirical revenue trends and institutional evaluation, the paper assesses whether GST has strengthened revenue generation, enhanced fiscal responsiveness, and contributed to long-term financial sustainability at the state level. Nationally, collections have grown steadily with a wider tax base, even after some rate rationalisations. For Uttar Pradesh, a large and diverse state, GST has supported rising own-tax revenue, reduced dependence on central transfers, and driven a surge in registrations often topping the country in new enrolments in recent months. Monthly collections frequently rank among the highest, reflecting stronger economic formalisation and activity.
Still, challenges persist. Small businesses in UP and elsewhere find compliance burdensome monthly filings, tech requirements, and complex rules hit micro-enterprises hard. Early portal glitches frustrated users, and debates over revenue sharing and state fiscal autonomy continue.
Overall, GST has created a more streamlined, transparent, and integrated indirect tax framework. It has boosted revenue mobilisation, eased inter-state trade, and laid the foundation for a national common market. For Uttar Pradesh, it has contributed to better fiscal performance and economic formalisation. Long-term success, however, depends on simplifying processes for small players, improving technology, and maintaining strong Centre-state cooperation.
Keywords Goods and Services Tax, Fiscal Federalism, Tax Buoyancy, Revenue Sustainability, Indirect Tax Reform, Uttar Pradesh, Public Finance, Tax Compliance, Indian Taxation System
Field Sociology > Economics
Published In Volume 8, Issue 2, March-April 2026
Published On 2026-04-19
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E-ISSN 2582-2160
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