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GST at 9: India's Tax Revolution Evolves
1 Jul
Summary
- GST expanded the taxpayer base from 6.5 million to nearly 16 million.
- Recent revenue collections have exceeded ₹6.3 lakh crore quarterly.
- Ongoing challenges include inverted duty structures and tribunal tech issues.
Nine years after its introduction on July 1, 2017, India's Goods and Services Tax (GST) has fundamentally reshaped the indirect tax landscape. It replaced numerous central and state levies with a unified system, dramatically expanding the taxpayer base from 6.5 million to nearly 16 million registered entities.
GST has demonstrably improved tax collections, with FY26 revenues reaching ₹22.27 lakh crore and the first quarter of FY27 showing an 8% year-on-year growth, exceeding ₹6.3 lakh crore. Monthly collections now average close to ₹2 lakh crore, with a record ₹2.36 lakh crore collected in April 2025.
Reforms have simplified the tax structure to 5% and 18% slabs, with a 40% rate for luxury goods. Digitalization has streamlined registration and filing processes. The GST Council has become a key platform for cooperative federalism.
Despite these successes, challenges persist. The inverted duty structure, where raw material taxes exceed finished goods taxes, continues to strain manufacturers' working capital. Technical glitches in the GST Appellate Tribunal's online filing system have also caused delays, extending the deadline for applications.
The GST Appellate Tribunal has begun operations with a backlog of over 4.5 lakh cases, aiming to expedite dispute resolution and reduce legal uncertainty for businesses. A forthcoming GST Council meeting in Kolkata is expected to address the inverted duty structure and further rate rationalization.
The next phase of GST reforms will focus on simplifying the tax structure, resolving pending disputes, and strengthening the technological infrastructure to create a more predictable and business-friendly tax regime.
