International Journal For Multidisciplinary Research

E-ISSN: 2582-2160   •   Impact Factor: 9.24

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Volume 8 Issue 5
September-October 2026

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Macroeconomic Impact of the Goods and Services Tax on the Indian Economy: Fiscal Formalization, Logistics Optimization, and Sectoral Rebalancing

Author(s) Mr. Ambresh M
Country India
Abstract The implementation of the Goods and Services Tax (GST) on July 1, 2017, marked the most comprehensive indirect tax transformation in modern Indian economic history, establishing a unified national market. Evaluating GST's multi-dimensional macroeconomic impact over its octennial lifecycle, this report utilizes fiscal statistics, econometric literature, and firm-level data to analyze revenue buoyancy, supply chain efficiencies, and price dynamics. Findings demonstrate that digital compliance architectures such as e-invoicing and e-way bills helped double gross annual collections to a record ₹22.08 lakh crore in FY25 (averaging ₹1.84–₹2.0 lakh crore monthly) while expanding active taxpayers from 60 lakh to over 1.52 crore. Net GST collections grew from 5.6% of GDP in FY19 to 6.1% in FY24. Econometrically, eliminating state border check posts reduced logistics costs by ~20%, optimizing hub-and-spoke warehousing. Despite brief initial inflationary shocks, the medium-to-long-term trajectory reflects price convergence and improved manufacturing competitiveness. Looking ahead, the structural transition toward "GST 2.0" featuring a streamlined two-tier rate structure (5% and 18%) alongside a 40% de-merit rate is projected to lower household GST liabilities by 10%–16%, cementing macroeconomic stability.
Keywords GST, VAT, GSTR-1 and GSTR-3B
Field Business Administration
Published In Volume 8, Issue 5, September-October 2026
Published On 2026-09-30
DOI https://doi.org/10.36948/ijfmr.2026.v08i05.88719
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CrossRef DOI prefix of IJFMR is 10.36948/ijfmr

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