GST Sees 134% Increase in Taxpayers Over 7 Years: Key Drivers and Trends

Since its implementation seven years ago, the Goods and Services Tax (GST) has seen a remarkable 134% increase in new taxpayers. According to data from the state commercial tax department, the number of active taxpayers has grown from 5.08 lakh on July 1, 2017, to 11.95 lakh currently. This surge is attributed to the greater formalization of the economy and new investments by industry experts and tax professionals.

A source from the SGST department noted that improved business growth has driven the steady rise in GSTINs issued each year. The taxpayer-friendly nature of the new tax regime has also facilitated more liberal new registrations. However, there was only a 0.5% increase in registrations in FY 2024 compared to the 11.90 lakh registrations in FY 2023.

To address the growing issue of bogus billing scams for tax evasion, the process for obtaining new registrations underwent a significant change with the introduction of mandatory biometric verification. This led to a marked decline in fresh GSTIN applications, with a decrease of around 25% between November 2023 and May 2024. The active taxpayer count excludes fraudulent registrations and is calculated after deducting cancelled registrations.

Industry sources also reported that fresh investments in semiconductors and other sectors have contributed to the rise in fresh GSTIN applications. Expansion by industries is another factor driving the increase in active taxpayers.