According to the Fifteenth Finance Commission, due to defaults and evasion the Government may lose ₹5 trillion in indirect tax revenue a year, amounting to 40% of its goods and services tax (GST) collection target. The Commission has assessed that the revenue loss was equivalent to 2.4% of gross domestic product (GDP). It is expected that Government might collect Rs.3.55 trillion by March end as it has already collected more than ₹9 trillion in GST in the nine months to 31 December. According to FFC, India’s overall tax-to-GDP ratio is about 17.2%, which, as per its calculations, should be about 22.6%. There is a gap of about 5.4%, of which GST compliance gap accounts for about 2.4% of GDP, according to the FFC presentation.
