Nine years of GST: Government highlights reforms, rising tax base and simplified compliance

Ziraat Times Team Report

New Delhi, June 30: As the Goods and Services Tax (GST) completes nine years on July 1, the Government of India has highlighted the indirect tax regime’s role in simplifying taxation, expanding the tax base and strengthening cooperative federalism through continuous reforms and digital transformation.

According to an official statement issued on Tuesday, GST has replaced a fragmented indirect tax system by subsuming 17 central and state taxes and 13 cesses into a unified framework, advancing the vision of “One Nation, One Tax.” The government said the reform has helped create a common national market while improving transparency, accountability and tax compliance.

Introduced on July 1, 2017, GST shifted India’s indirect taxation system from multiple levies on manufacture, sale and services to a destination-based tax on the supply of goods and services. The government said the reform has reduced cascading taxes and standardised tax rates across the country.

The statement noted that the GST Council has played a central role in guiding policy decisions through consensus between the Centre and states, strengthening cooperative federalism while enabling periodic reforms in response to changing economic conditions.

The government also highlighted the role of the Goods and Services Tax Network (GSTN), a joint Centre-State digital platform, in supporting online registration, return filing, invoicing and tax administration through technology-driven systems.

A major milestone cited in the statement was the rollout of the Next-Generation GST reforms, commonly referred to as GST 2.0, which came into effect on September 22, 2025, following approval by the 56th GST Council meeting.

Under the new framework, the tax structure has largely been simplified into two principal slabs of 5 per cent and 18 per cent, while a 40 per cent tax rate has been introduced for luxury and “sin” goods such as tobacco products, online gaming, lottery, aerated drinks, high-end automobiles, yachts and private aircraft.

The government said GST 2.0 has also simplified business registration, return filing and refund processing, particularly benefiting micro, small and medium enterprises (MSMEs), startups and exporters.

According to the statement, lower GST rates and exemptions on selected goods and services are expected to reduce household expenses, improve affordability and encourage consumption. Exemptions on insurance and essential medicines have also been introduced to strengthen financial and healthcare protection for consumers.

The government said businesses have benefited from reduced GST rates on key sectors, including cement and handicrafts, while correction of inverted duty structures is expected to encourage domestic value addition and exports.

Several measures have also been introduced to reduce compliance costs for small businesses. These include increasing the GST registration threshold for goods suppliers from ₹20 lakh to ₹40 lakh, raising the turnover limit under the composition scheme from ₹75 lakh to ₹1.5 crore, introducing the Quarterly Return Monthly Payment (QRMP) scheme for eligible taxpayers, allowing NIL returns through SMS and simplifying GST registration for low-risk applicants.

The statement further highlighted the increasing use of artificial intelligence, machine learning and data analytics in GST administration to improve risk assessment, detect tax evasion and facilitate targeted enforcement while reducing compliance burdens for honest taxpayers.

According to government data, the number of registered GST taxpayers has increased from 66.5 lakh in 2017 to 1.65 crore as of May 2026, reflecting greater formalisation of the economy.

Gross GST collections have also recorded sustained growth, rising from around ₹7.4 lakh crore in 2017-18 to approximately ₹22.27 lakh crore in 2025-26. During the first two months of the current financial year, April and May 2026, GST collections stood at around ₹4.37 lakh crore.

The government said GST continues to evolve through periodic reforms aimed at simplifying tax administration, improving compliance and supporting India’s broader objective of becoming a developed economy under the Viksit Bharat vision.