Do Taxes on Commodities and Services Bear a Disproportionate Burden in India? An Assessment from 2011–2012 to 2022

Abstract

Taxes on commodities and services (TOCS) contribute, on average, 62.31% of the general government’s total tax collection in India. This shows that a larger share of the tax burden rests on consumption than taxes on income, property, capital and other transactions. Indian public finance literature lacks a comprehensive assessment of tax collection from TOCS. This article assesses the trends in revenue mobilisation from TOCS during 2011–2023 for the Union, states and general governments. Notably, during 2018–2023, half of the TOCS collection and two-thirds of the total tax revenue of the general government were collected outside the goods and services tax (GST) system. This observation points to the potential for the GST system to broaden its coverage in the future, encompassing a more comprehensive range of commodities and services. This expansion could significantly impact the landscape of tax collection in India.

Keywords

Tax revenue taxes on consumption goods and services tax public finances India

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Do Taxes on Commodities and Services Bear a Disproportionate Burden in India? An Assessment from 2011–2012 to 2022–2023

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