GST and states, a reality check of how indirect tax system is working

Early fears about the regime have not come true, but there is room for improvement

Taiwan in 1951 came up with an ingenious plan to improve tax compliance: citizens taking receipts for purchases could use them as lottery tickets. Customers were incentivized, and businesses found it hard to evade taxes. The plan’s success prompted other countries, Slovakia and Greece among them, to launch similar initiatives.

India doesn’t seem to find the need yet for such schemes amid surging goods and services tax (GST) collections. Overall collections touched a record high of Rs 1.87 trillion in April 2023, though there are some differences among individual states.

The fears large manufacturing states expressed when the GST regime