Enumerate the indirect taxes which have been subsumed in the Goods and Services Tax (GST) in India. Also,…

Question

Enumerate the indirect taxes which have been subsumed in the Goods and Services Tax (GST) in India. Also, comment on the revenue implications of the GST introduced in India since July 2017.

Ghissu Editorial · Accepted Answer

GST subsumed central excise, service tax, CVD, SAD and central cesses along with state VAT, CST, entry, entertainment, luxury and purchase taxes, octroi and state cesses. Revenue first lagged because of rate cuts below the revenue-neutral rate, then rose to a record Rs 22.08 lakh crore in 2024-25.

**Introduction**

The 101st Constitutional Amendment Act, 2016 folded seventeen central and state levies into a dual, destination-based GST from 1 July 2017, widening the base at the cost of lower rates and state autonomy.

**Indirect Taxes Subsumed in GST**

1. **Central levies**: Central excise and additional excise duties, excise under the Medicinal and Toilet Preparations Act, service tax, CVD, SAD, and central cesses and surcharges.
2. **State levies**: VAT or sales tax, CST, purchase tax, luxury tax, entry tax and octroi, entertainment tax (except by local bodies), advertisement tax, taxes on lottery, betting and gambling, and state cesses.
3. **Kept outside**: Basic customs duty, stamp duty, electricity duty, alcohol and five petroleum products.

**Revenue Implications Since July 2017**

SKETCH: forcefield | Forces on GST Revenue
center: GST collections
driving: Wider tax base, E-way bills, E-invoicing
restraining: Rate cuts, ITC fraud, Petroleum excluded

1. **Base widening**: Registrations rose from about 60 lakh in 2017 to 1.51 crore by April 2025 (GST Council), and e-way bills curbed evasion in goods movement.
2. **Below revenue neutrality**: Rate cuts, such as 178 items moved from 28% to 18% in 2017, kept the effective rate below the Subramanian Committee's 15 to 15.5%.
3. **States' dependence**: Having surrendered most own indirect taxes, states relied on compensation guaranteeing 14% annual growth, and its delays in 2019 and 2020 caused federal friction.
4. **Rising buoyancy**: Collections grew from Rs 11.37 lakh crore in 2020-21 to Rs 22.08 lakh crore in 2024-25 (PIB, 2025).

**Conclusion**

GST traded rates and autonomy for a broader, traceable base, a bargain now paying off. The 2025 two-slab structure will test whether buoyancy alone can sustain revenue without compensation.

Enumerate the indirect taxes which have been subsumed in the Goods and Services Tax (GST) in India. Also, comment on the revenue implications of the GST introduced in India since July 2017.

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