Article: Determinants of goods and services tax revenue efficiency of sub-national governments in India: a solution to the dilemma of Indian states Journal: International Journal of Public Law and Policy (IJPLAP) 2026 Vol.12 No.3 pp.319 - 341 Abstract: The Indian government implemented the goods and services tax (GST) to improve the indirect tax system; however, it has adversely impacted GSTefficiency across Indian states. Therefore, this study aims to investigate the determinants of GSTefficiency to enable policymakers and government to craft their strategies and policies accordingly. The analysis has employed panel regression modelling by covering the data from 2017-2018 to 2022-2023. The findings illustrate that the central dependency of states, inflation rate, total outstanding liability and the share of agriculture sector adversely affect GSTefficiency of the sub-national governments. Conversely, the results depict that financial variables, urbanisation rate, capital outlay, service sector contribution and own tax revenue to boost GSTefficiency. The findings hold significant implications for government, policy practitioners and the Finance Commission of India by offering valuable insights for informed decision making and strategic policy development. The state government should make efforts to increase their own tax revenue resources to boost their GSTefficiency. Inderscience Publishers - linking academia, business and industry through research

Title: Determinants of goods and services tax revenue efficiency of sub-national governments in India: a solution to the dilemma of Indian states

Authors: Shubham Garg; Sangeeta Mittal; Aman Garg

Addresses: Haryana School of Business, Guru Jambheshwar University of Science and Technology, Hisar, Haryana, India ' Haryana School of Business, Guru Jambheshwar University of Science and Technology, Hisar, Haryana, India ' Department of Commerce, Government College, Hisar, Haryana, India

Abstract: The Indian government implemented the goods and services tax (GST) to improve the indirect tax system; however, it has adversely impacted GST_efficiency across Indian states. Therefore, this study aims to investigate the determinants of GST_efficiency to enable policymakers and government to craft their strategies and policies accordingly. The analysis has employed panel regression modelling by covering the data from 2017-2018 to 2022-2023. The findings illustrate that the central dependency of states, inflation rate, total outstanding liability and the share of agriculture sector adversely affect GST_efficiency of the sub-national governments. Conversely, the results depict that financial variables, urbanisation rate, capital outlay, service sector contribution and own tax revenue to boost GST_efficiency. The findings hold significant implications for government, policy practitioners and the Finance Commission of India by offering valuable insights for informed decision making and strategic policy development. The state government should make efforts to increase their own tax revenue resources to boost their GST_efficiency.

Keywords: determinants; goods and services tax; GST; GST efficiency; Indian states; indirect tax; sub-national governments; policymakers; panel regression; revenue mobilisation and tax revenue.

DOI: 10.1504/IJPLAP.2026.155207

International Journal of Public Law and Policy, 2026 Vol.12 No.3, pp.319 - 341

Received: 14 Dec 2024
Accepted: 30 Mar 2025
Published online: 29 Jul 2026 *

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Title: Determinants of goods and services tax revenue efficiency of sub-national governments in India: a solution to the dilemma of Indian states

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