5 States Make Up Half of India’s GST Taxpayers
A recent SBI Research report shows that five states—Uttar Pradesh, Maharashtra, Gujarat, Tamil Nadu, and Karnataka—together account for nearly 50% of all active GST taxpayers in India, eight years after GST implementation.
UP Leads the Pack
- Uttar Pradesh tops the list with 13.2% of active GST registrations.
- Maharashtra follows at 12.1%,
- Gujarat at 8.4%, Tamil Nadu at 7.7%, and Karnataka at 6.9%.
This concentration reflects a strong formal business presence in these states.
Economic Strength Doesn’t Always Mean Tax Spread
The report flags an interesting trend: some economically strong states, such as Telangana, Kerala, Andhra Pradesh, and Karnataka, have lower shares of GST taxpayers compared to their share of Gross State Domestic Product (GSDP). This suggests these regions haven’t fully tapped into business formalisation.
Smaller States Show Surprising Compliance
In contrast, states like Bihar contribute more in taxpayer numbers relative to their economic output. For example, Bihar makes up 4.3% of GST taxpayers while contributing only 2.8% to national GSDP—indicating strong compliance in smaller economies.
Low Tax Coverage in Hill and Northeastern Regions
On the opposite end, states including Uttarakhand, Chhattisgarh, Jammu & Kashmir, and Himachal Pradesh each account for 1.4% or less of GST registrations, highlighting a need to boost business formalisation and tax outreach in these regions.
Key Takeaway
While overall compliance has improved since GST began, the report highlights significant regional imbalances. Richer states still need greater tax formalisation among SMEs, while smaller states show high uptake of GST registration. The findings point to areas where targeted policy action could broaden India’s formal economy.
