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Assessment of the revenue performance of states in the GST is vital, as State GST (SGST) constitutes a significant part of states’ own tax revenue. Sustaining the revenue stream from taxes included in the GST is crucial for managing state finances. It is expected that states will at least generate revenue from SGST to maintain the share of revenue (in the nominal GSDP) incorporated into the GST during the base year (i.e., 2015-16). This paper's assessment reveals that some states, between 2018-19 and 2023-24, did not achieve the required share. Even with GST compensation, some states still fall short of the target share. This indicates that managing revenue shortfalls will be a challenge for some states after the GST compensation period. Moreover, there is a need to explore options for increasing states’ revenue base by examining new tax sources and investigating innovative areas of taxation (e.g., storage and usage of digital information, online video sharing, robotics). The taxation system could also address externalities related to the environment, biodiversity, health, and activities/entertainments that have financial risks.

Key Words: Revenue performance assessment, Goods and Services Tax (GST), Tax buoyancy,

JEL Codes: H20, E62, H26.