New Delhi [India], July 22 : As the Goods and Services Tax (GST) has completed eight years since its rollout, a recent report by SBI Research showed that just five states account for nearly 50 per cent of the total active GST taxpayers in India.
This indicates a significant concentration of tax registration in a handful of states, highlighting the scope for improvement in others.
It stated "Top 5 states accounted for approx. 50 per cent of total Active GST Tax Payers"
The five states leading in GST taxpayer registrations are Uttar Pradesh, Maharashtra, Gujarat, Tamil Nadu, and Karnataka.
Among these, Uttar Pradesh tops the list, 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).
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.
In contrast, states such as Uttar Pradesh, Bihar, and Gujarat exhibit a reverse trend. Their share in total GST registrations is higher than their share in GSDP, suggesting greater formalisation and improved tax compliance.
For example, Bihar contributes 4.3 per cent of total GST taxpayers, despite having only 2.8 per cent share in national GSDP.
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.
As GST has completed eight years of implementation, the data reveal that while progress has been made in expanding the tax base, a large untapped opportunity remains, particularly in wealthier and more industrialised states.
This insight can help guide future policy efforts aimed at increasing formalisation and boosting GST compliance across all regions.
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