India’s Goods and Services Tax (GST) has completed eight years since it was launched on 1 July 2017. According to the finance ministry, GST has helped both the government and businesses, especially small companies, by making tax collection more efficient and helping businesses get easier access to credit.
The total annual GST revenue has doubled in the last five years. In FY21, the central and state governments collected ₹11.37 trillion. By FY25, this number had reached ₹22.08 trillion.
Making GST Easier for All
The government now plans to make GST even simpler. One of the major upcoming changes is to reduce the number of tax slabs. Goods and services in the 12% tax slab may be moved to either 5% or 18%, which will make the structure cleaner and easier to understand. This will also fix current problems where some raw materials are taxed more than the final product.
The ministry also highlighted that micro, small, and medium enterprises (MSMEs) have gained from the GST system. They now find it easier to get bank loans, thanks to online platforms like TReDS (Trade Receivables Discounting System). This system allows small businesses to sell their unpaid invoices to banks or finance companies and receive quick cash. Over 5,000 buyers, 53 banks, and 13 NBFCs are now part of TReDS.
What Experts Say
A report by PricewaterhouseCoopers (PwC) praised GST for helping unite markets, increasing compliance, and using digital tools for tax collection. But experts believe the government still needs to do more. The next steps should include:
- Simplifying tax rates
- Clearing blocked tax credits
- Reducing paperwork
- Starting GST appellate tribunals for quicker dispute resolutions
Manoj Mishra from Grant Thornton Bharat said that while GST’s structure is ready, its success depends on how well it is run. Including petroleum products in GST and making rules more clear are still big tasks ahead. The GST journey isn’t over, but it’s moving in the right direction.
