GST and Tax Evasion in India : Evidence from Practitioner Surveys
Authors
- Anuj Bansal FPM Scholar, Jaipuria Institute of Management, Noida, A-32A, Sector 62, Noida - 201 309, Uttar Pradesh
-
Vranda Jain
Associate Professor (Corresponding Author), Jaipuria Institute of Management, Noida, A-32A, Sector 62, Noida - 201 309, Uttar Pradesh
https://orcid.org/0000-0002-8903-3575
- Gourab Chatterjee Assistant Manager, AI Department, Jaipuria Institute of Management, Indore, Madhya Pradesh
DOI:
https://doi.org/10.17010/pijom/2026/v19i3/175058Keywords:
GST, black money, tax evasion, invoice matching, digital tax administration, India, tax compliance, e-way bills.JEL Classification Codes : E26, H20, H25, H26
Publishing Chronology: Paper Submission Date : August 25, 2025 ; Paper sent back for Revision : February 5, 2026 ; Paper Acceptance Date : March 5, 2026 ; Paper Published Online : March 15, 2026
Abstract
Purpose : This study focused on the effective mechanism of GST as per the views of practicing tax professionals on curbing the circulation of black money and tax evasion in India.
Design/Methodology/Approach : For this study, 47 tax professionals (chartered accountants, tax advocates, and company secretaries) were enrolled using purposive expert sampling. The researchers used a quantitative cross-sectional survey design to collect data in January and February 2025. Descriptive statistics, Pearson correlation analysis, and independent variables were used in the data analysis.
Findings : The findings indicated that GST achieved only partial success in reducing black money. Real estate remained the most vulnerable sector (M = 3.77). Cash transactions and fake invoicing were the most common evasion methods, and they were correlated with shell companies (r = 0.722). Invoice matching, rated most effective (M = 3.75), showed alignment with e-way bills (r = 0.782). Portal glitches and input tax credit (ITC) errors were key compliance challenges. No significant group differences suggested perceptions reflected objective system performance.
Practical Implications : To harness the full anti-evasion potential of GST, targeted digital infrastructure, sector-specific property reforms, and integrated network analysis to detect collusion will be required.
Originality/Value : Studies have examined GST’s influence on black money in India. Among the first studies, four experts investigated the effects of GST on black money among tax experts using well-tested, well-recognized statistics.
Downloads
References
1) Aizenman, J., & Jinjarak, Y. (2008). The collection efficiency of the value added tax: Theory and international evidence. The Journal of International Trade & Economic Development, 17(3), 391–410. https://doi.org/10.1080/09638190802137059
2) Ali, M., Fjeldstad, O.-H., & Sjursen, I. H. (2014). To pay or not to pay? Citizens' attitudes toward taxation in Kenya, Tanzania, Uganda, and South Africa. World Development, 64, 828–842. https://doi.org/10.1016/j.worlddev.2014.07.006
3) Allingham, M. G., & Sandmo, A. (1972). Income tax evasion: A theoretical analysis. Journal of Public Economics, 1(3–4), 323–338. https://doi.org/10.1016/0047-2727(72)90010-2
4) Alm, J. (2019). What motivates tax compliance? Journal of Economic Surveys, 33(2), 353–388. https://doi.org/10.1111/joes.12272
5) Andreoni, J., Erard, B., & Feinstein, J. (1998). Tax compliance. Journal of Economic Literature, 36(2), 818–860. https://www.jstor.org/stable/2565123
6) Basavanagouda, & Panduranga, V. (2022). Perspectives and role of GST practitioners in promoting GST compliance in India. Vision: The Journal of Business Perspective. https://doi.org/10.1177/09722629221114604
7) Bellon, M., Dabla-Norris, E., Khalid, S., & Lima, F. (2022). Digitalization to improve tax compliance: Evidence from VAT e-invoicing in Peru. Journal of Public Economics, 210, Article ID 104661. https://doi.org/10.1016/j.jpubeco.2022.104661
8) Bhatta, S. R., Shetty, D. K., Shenoy, S. S., Rodrigues, L. L., & Ola, M. O. (2026). Sustainable e-commerce adoption: Green supply chain practices and consumer perceptions. Prabandhan: Indian Journal of Management, 19(2), 8–26. https://doi.org/10.17010/pijom/2026/v19i2/175042
9) Bird, R. M., & Gendron, P.-P. (2009). The VAT in developing and transitional countries. Cambridge University Press. https://doi.org/10.1017/CBO9780511619366
10) Biswas, W., & Giri, A. (2026). How does FoMO boost the usage of mobile payment apps? Prabandhan: Indian Journal of Management, 19(1), 73–83. https://doi.org/10.17010/pijom/2026/v19i1/175038
11) Chetty, R., & Saez, E. (2013). Teaching the tax code: Earnings responses to an experiment with EITC recipients. American Economic Journal: Applied Economics, 5(1), 1–31. https://doi.org/10.1257/app.5.1.1
12) Choudhury, R., & Gupta, S. (2025). Augmentation of financial inclusion: A structured review from the Indian perspective. Indian Journal of Finance, 19(5), 58–78. https://doi.org/10.17010/ijf/2025/v19i5/175044
13) Cnossen, S. (2015). Mobilizing VAT revenues in African countries. International Tax and Public Finance, 22(6), 1077–1108. https://doi.org/10.1007/s10797-015-9348-1
14) Dhami, S., & al-Nowaihi, A. (2007). Why do people pay taxes? Prospect theory versus expected utility theory. Journal of Economic Behavior & Organization, 64(1), 171–192. https://doi.org/10.1016/j.jebo.2006.08.006
15) Diwakar, K., & Bhalla, P. (2026). Evolution of trans-social entrepreneurship in India: An untold journey from 1990–2025. Prabandhan: Indian Journal of Management, 19(1), 30–53. https://doi.org/10.17010/pijom/2026/v19i1/173825
16) Dutta, A. S., & Kulkarni, K. G. (2018). Cash shortages and black money: A look at India's 2016 demonetization effect, one year later. International Review of Business and Economics, 2(1), Article no. 4. https://doi.org/10.56902/IRBE.2018.2.1.4
17) Dwenger, N., Kleven, H., Rasul, I., & Rincke, J. (2016). Extrinsic and intrinsic motivations for tax compliance: Evidence from a field experiment in Germany. American Economic Journal: Economic Policy, 8(3), 203–232. https://doi.org/10.1257/pol.20150083
18) Foley, S., Karlsen, J. R., & Putniņš, T. J. (2019). Sex, drugs, and bitcoin: How much illegal activity is financed through cryptocurrencies? The Review of Financial Studies, 32(5), 1798–1853. https://doi.org/10.1093/rfs/hhz015
19) Hallsworth, M. (2014). The use of field experiments to increase tax compliance. Oxford Review of Economic Policy, 30(4), 658–679. https://doi.org/10.1093/oxrep/gru034
20) Kaur, M., & Dhiman, B. (2025). Financial literacy as a driver of governance and sustainability in small and medium enterprises. Prabandhan: Indian Journal of Management, 18(11), 27–44. https://doi.org/10.17010/pijom/2025/v18i11/173882
21) Kethankar, B. R. (2023). Tax evasion and black money in India: Causes and solutions. ShodhKosh: Journal of Visual and Performing Arts, 4(2), 4842–4847. https://doi.org/10.29121/shodhkosh.v4.i2.2023.5754
22) Kirchler, E. (2007). The economic psychology of tax behaviour. Cambridge University Press. https://doi.org/10.1017/CBO9780511628238
23) Kleven, H. J., Knudsen, M. B., Kreiner, C. T., Pedersen, S., & Saez, E. (2011). Unwilling or unable to cheat? Evidence from a tax audit experiment in Denmark. Econometrica, 79(3), 651–692. https://doi.org/10.3982/ECTA9113
24) Kotsogiannis, C., Salvadori, L., Karangwa, J., & Murasi, I. (2025). E-invoicing, tax audits and VAT compliance. Journal of Development Economics, 172, Article ID 103403. https://doi.org/10.1016/j.jdeveco.2024.103403
25) Luttmer, E. F., & Singhal, M. (2014). Tax morale. Journal of Economic Perspectives, 28(4), 149–168. https://doi.org/10.1257/jep.28.4.149
26) Mascagni, G. (2018). From the lab to the field: A review of tax experiments. Journal of Economic Surveys, 32(2), 273–301. https://doi.org/10.1111/joes.12201
27) Ministry of Finance, Government of India. (2012). White paper on black money. https://prsindia.org/policy/report-summaries/white-paper-black-money
28) Ministry of Finance, Government of India. (2023). GST evasion detected during April–October 2023 [Reply to Rajya Sabha Unstarred Question No. 1171, 12 December, 2023]. Department of Revenue.
29) Ministry of Law and Justice, Government of India. (2015). The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. https://egazette.nic.in/WriteReadData/2015/164282.pdf
30) Nahar, K., & Ranade, M. (2026). Deciphering pico-solar product adoption: A random forest approach. Indian Journal of Marketing, 56(1), 10–28. https://doi.org/10.17010/ijom/2026/v56/i1/175432
31) Naritomi, J. (2019). Consumers as tax auditors. American Economic Review, 109(9), 3031–3072. https://doi.org/10.1257/aer.20160658
32) OECD. (2021). Tax administration 2021: Comparative information on OECD and other advanced and emerging economies. OECD Publishing. https://doi.org/10.1787/cef472b9-en
33) Pomeranz, D. (2015). No taxation without information: Deterrence and self-enforcement in the value added tax. American Economic Review, 105(8), 2539–2569. https://doi.org/10.1257/aer.20130393
34) Ramesh, S. (2020). E-invoicing - A major step towards digital tax administration. PwC.
35) Schneider, F., & Enste, D. H. (2000). Shadow economies: Size, causes, and consequences. Journal of Economic Literature, 38(1), 77–114. https://doi.org/10.1257/jel.38.1.77
36) Shetty, N., Ramaprasad, B. S., & Praveen, S. (2026). Financing climate resilience from the bottom up: A perspective on reimagining Pradhan Mantri Mudra Yojana as India's micro-green bank. Indian Journal of Finance, 20(1), 38–46. https://doi.org/10.17010/ijf/2026/v20i1/175218
37) Siddiqui, T. A., Ali, M. S., Sunayana, Alam, N., & Ranjan, P. (2025). Understanding financial inclusion through social and behavioural lenses. Prabandhan: Indian Journal of Management, 18(4), 52–71. https://doi.org/10.17010/pijom/2025/v18i4/174316
38) Singh, A. K., Jain, S., & Goel, R. (2026). Climate consciousness vs. profit chase: Asset behavior in a sustainable era. Indian Journal of Finance, 20(1), 8–23. https://doi.org/10.17010/ijf/2026/v20i1/175251
39) Siwach, P., Kumar, R. P., & Gupta, V. (2024). Looking beyond initial boost: Examining the long-term performance of small business IPOs. Indian Journal of Finance, 18(12), 8–23. https://doi.org/10.17010/ijf/2024/v18i12/174665
40) Slemrod, J. (2019). Tax compliance and enforcement. Journal of Economic Literature, 57(4), 904–954. https://doi.org/10.1257/jel.20181437
41) Slemrod, J., & Yitzhaki, S. (2002). Chapter 22 - Tax avoidance, evasion, and administration. In Handbook of public economics (Vol. 3, pp. 1423–1470). Elsevier. https://doi.org/10.1016/S1573-4420(02)80026-X
42) Sullivan, G. M., & Artino Jr., A. R. (2013). Analyzing and interpreting data from Likert-type scales. Journal of Graduate Medical Education, 5(4), 541–542. https://doi.org/10.4300/JGME-5-4-18
43) Sumbul, Rizvi, Z. B., & Siddiqui, S. (2024). Were Islamic indices resistant to volatility during the COVID-19 period? Indian Journal of Finance, 18(12), 56–75. https://doi.org/10.17010/ijf/2024/v18i12/174668
44) Tewary, T., & Jain, V. (2026). Circular economy and blockchain technology: Pathways to economic, social, and environmental sustainability. Prabandhan: Indian Journal of Management, 19(2), 27–44. https://doi.org/10.17010/pijom/2026/v19i2/175043
45) Thakkar, H., Joshi, V., & Bhatt, R. (2024). GST fraud: Unveiling the modus operandi of input tax credit fraud schemes. VIDYA – A Journal of Gujarat University, 3(1), 35–39. https://doi.org/10.47413/vidya.v3i1.357
46) Torgler, B. (2007). Tax compliance and tax morale: A theoretical and empirical analysis. Edward Elgar Publishing.
47) Wadhwa, R. (2024). Dividend policy determinants: An experiential study of financial markets. Indian Journal of Finance, 18(12), 38–55. https://doi.org/10.17010/ijf/2024/v18i12/174667
48) Waseem, M. (2022). The role of withholding in the self-enforcement of a value-added tax: Evidence from Pakistan. The Review of Economics and Statistics, 104(2), 336–354. https://doi.org/10.1162/rest_a_00959
