A study on indirect tax revenue, cpi and inflation trend through econometric analysis

Studying the trends in indirect tax revenue, Consumer Price Index (CPI), and inflation before and after GST implementation is essential to evaluate the reform's success in unifying the economy, ensuring fiscal stability, and protecting consumer purchasing power. The objective of this paper is to identify the trend and to study the propensity of price changes before and after GST by employing Model comparison using Regression analysis the different models (Linear, Quadratic and Exponential) has been considered. The data is collected from government website of Department of revenue, Ministry of finance, which provided yearly data for indirect taxes estimates, and Consumer Price Index (CPI) data and inflation rates are obtained from monthly publications by Central Statistics Office, Ministry of statistics and Programme Implementation (MOSPI) and using this secondary data average yearly values are calculated. The period of study is 10 years consisting of five years before the adoption of GST (2012-2017) and five years after the adoption of GST (2017-2022). The findings shows exponential model is the best fit for both periods, indicating a steady increase in indirect tax revenue and inflation rates. The higher R-squared values for the period before GST suggest that the models were better suited to the economic conditions before GST implementation.