After the rollout of the goods and services tax (GST) six years ago, the number of new taxpayers has jumped. According to information from the state commercial tax department, the number of active GST taxpayers has increased by 124% in six years, from 5.08 lakh on July 1, 2017, when the new regime came into effect to 11.44 lakh now.
Industry players and tax professionals attribute the increase in taxpayers to the greater formalization of the economy, in addition to fresh investments.
“Hassle-free migration and registration processes and increasing formalization of the economy are the prime reasons for the increase in the number of taxpayers, as more of them have been brought under the ambit of GST,” said a senior official of the state commercial tax department.
The active taxpayer count does not include fraudulent registrations and is computed after deducting cancelled registrations.
Fresh investments in many sectors have also led to more new companies being registered.
Pathik Patwari, president of the Gujarat Chamber of Commerce, and Industry (GCCI), said, “Several fresh investments have taken place in several industrial clusters in Gujarat. For instance, after the rollout of GST, the pharma sector saw an influx of new players moving to Gujarat or making greenfield investments here.
Similarly, the apparel and ceramics industries have also seen significant expansion. Since Covid, we have seen a huge push in the services industry with a significant chunk of IT business migrating to India. This and the industry-friendly policies of the government have significantly increased the taxpayer base.”