Evaluating the GST Revenue Trends and Their Correlation with GDP Growth of India

Economic growth and development is always one of the most important macroeconomic goal of any country. Government has responsibilities to raise the capacity of an economy to produce goods and services over a period. Governments are saddled with the responsibilities to maintain stability, equity and justified distribution of resources among the citizens. It is levied in all part of the world primarily to raise revenue for government expenditures although they serve other purposes as well. According to American economist, Richard A. Musgrave, the objectives of taxation are resource allocation, income redistribution and economic stability. It is veryimportant that the taxation system is designed in such an appropriate manner that it doesn’t lead to any sort of market distortions and failures in the economy. The present paper attempt to investigate the Dynamics of Goods and Service tax and Economic growth in India since it is implemented. It provide a comprehensive understanding of GST revenue performance & its association with GDP as proxy of Economic growth. The study was based on secondary data analysis. Correlation coefficient test and percentage growth rate were used as techniques of data analysis. The study found out the rising trend of GST revenue over a period of time since it is implemented from 2017. The study also find out the trend of GST to GDP ratio and examine the significance of GST tax to GDP ratio & Tax Buoyancy for economic growth of the country and reducing tax gap.