GST @ 8: From unified tax roll-out to roadmap for future reform

GST Appellate Tribunals will help speed up dispute resolution.

India’s landmark Goods and Services Tax (GST) completes eight years on July 1, 2025, marking a significant milestone in the country’s indirect tax reform journey. Launched on July 1, 2017, GST aimed to unify India’s fragmented tax system by subsuming multiple central and state levies under a common framework. Eight years later, GST has emerged as a transformative force — simplifying compliance, fostering ease of business, and knitting together a national market.

From Roll-Out to Record Collections

Launch (2017): GST subsumed over 17 central and state taxes under a destination-based dual-GST model featuring Central GST (CGST), State GST (SGST) and Integrated GST (IGST).

Early Fixes (2018–19): The government introduced the e-way bill system, undertook rate rationalisations, and rolled out the Quarterly Return Filing and Monthly Payment of Taxes (QRMP) and composition schemes to ease compliance for small taxpayers.

Pandemic Response (2020): States grappled with shortfalls in GST compensation during the COVID-19 pandemic. The Centre introduced special borrowing mechanisms to bridge the gap, while e-invoicing was expanded to tighten compliance.

Tech-Enabled Compliance (2021–22): Mandatory e-invoicing for large taxpayers, automated return filing, and the use of data analytics became key tools to curb tax evasion and improve transparency.

Reforms and Rationalisation (2023–25): The GST Council approved the setting up of appellate tribunals, while deeper rate rationalisation reduced the number of items in the 28 percent slab by 35.

Achievements

Revenue Records: GST collections reached a record Rs 22.08 lakh crore in 2024–25 — a 9.4 percent year-over-year increase — continuing an upward trajectory from Rs 20.18 lakh crore in 2023–24.

Taxpayer Base Expansion: Active GST registrations rose to 1.51 crore as of April 2025, up from just 60 lakh in 2017.

Positive Business Sentiment: According to Deloitte’s GST@8 industry survey, 85 percent of respondents reported a positive experience, citing streamlined processes and greater transparency.

Challenges Ahead

Eight years on, GST has evolved into a robust, digitally driven tax ecosystem — boosting revenue, fostering transparency, and simplifying business. Yet, challenges remain.

Compliance Complexity: Despite simplification efforts, the four-tier rate structure and compensation cess framework continue to be complex and contentious.

Refund Delays: Micro, small and medium enterprises (MSMEs) and exporters still face bottlenecks in claim processing.

Centre-State Contentions: Disputes persist over compensation issues and the inclusion of petroleum products and alcohol under GST.

Inverted Duty Structures: Certain sectors continue to struggle with credit mismatches that disrupt value chains.

The Path Forward

Rate Rationalisation: The government aims to further reduce ceiling slabs, streamline exemption lists, and rationalise high-rate items.

Digital Push: Expansion of e-invoicing, auto-populated returns, and Aadhaar-based compliance tools is expected to deepen digitisation.

Tribunal System: Operationalising GST Appellate Tribunals will help speed up dispute resolution.

Tax Base Expansion: Focus will continue on enrolling new taxpayers and building consensus for the inclusion of petroleum products under GST.

Ease-of-Doing-Business Measures: Introduction of single monthly return forms and extension of QRMP benefits for small traders are on the agenda.

Why GST Matters

Economic Integration: A unified tax structure supports fluid interstate commerce.

Consumer Benefit: Efficiency gains have helped lower consumption costs.

Fiscal Resilience: GST has provided a steady revenue stream, even during economic shocks.

“GST has played a pivotal role in boosting both tax revenue and compliance across sectors. The implementation of GST has led to the digitisation of tax processes, significantly improving transparency and accountability. As highlighted in our GST@8 survey, 51 percent of respondents rated automation of tax compliance as the top-performing area, and 99 percent of businesses reported readiness or partial readiness for GST audits — reflecting strong digital resilience,” Mahesh Jaising, Partner and Indirect Tax Leader, Deloitte India, said.

Initiatives such as e-invoicing, auto-population of returns, e-way bills and real-time data analytics have reduced manual errors and enhanced filing accuracy, thereby encouraging more businesses to comply voluntarily. The key top four ranked positive impact areas in the survey are compliance digitisation (62 percent), supply chain optimisation (59 percent), competitive pricing (55 percent), and responsiveness on tax policy (48 percent), he said.

Moreover, the consolidation of multiple indirect taxes into a single unified system has simplified the tax structure, making it easier for businesses to understand and adhere to their obligations. This has also helped broaden the tax base, bringing previously unregistered entities into the formal economy and contributing to a consistent rise in tax revenues, even amid economic fluctuations. The monthly GST collections have become a reliable indicator of economic activity, reflecting both improved compliance and robust consumption patterns. By fostering a culture of accountability and transparency, GST has not only enhanced revenue generation but also strengthened the foundation for a more equitable and efficient tax regime in India,” Mahesh Jaising, Partner and Indirect Tax Leader, Deloitte India, Jaising added.

“The Goods and Services Tax regime has completed eight transformative years since its implementation on July 1, 2017. This landmark tax reform aimed to simplify the taxation structure by unifying multiple indirect taxes into a single comprehensive framework, thereby promoting ease of doing business, enhancing compliance, and reducing tax leakages. Over the years, GST has facilitated seamless interstate trade, reduced the cascading effect of taxes and improved revenue collections. Additionally, it has empowered small and medium enterprises by lowering the tax burden and fostering a more competitive market environment. Despite challenges such as initial disruptions and ongoing adaptations, GST has largely contributed to the country’s economic growth, reflecting its importance in India’s fiscal landscape,” Rajat Bose, Partner, Shardul Amarchand Mangaldas & Co., said.