State-level integration under GST shows modest gains in post-Covid period

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Illustration: Binay Sinha

5 min read Last Updated : Sep 27 2024 | 12:29 AM IST

The issue of inter-state variations in revenue performance is often a matter of debate. The change in the tax regime from the earlier value-added tax (VAT) to the goods and services tax (GST) marked a transition from a source-based tax to a destination-based tax for states. In the previous regime, inter-state transactions were taxed by the exporting state, whereas now, the revenues accrue to the destination state. This change in the design of the tax regime was argued to shift the revenue to consuming states from producing states. Further, with the introduction of GST, states are expected

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