As the Goods and Services Tax (GST) completes eight years since its landmark rollout on July 1, 2017, it stands as one of India’s most significant economic reforms in recent decades. It was launched with the vision of “One Nation, One Tax,” replacing a labyrinth of central and state levies with a unified indirect tax regime.From ₹7 Lakh Crore to ₹22 Lakh Crore: A Revenue Revolution
Gross GST collections touched a record ₹22.08 lakh crore in FY25, up 9.4% year-on-year and over three times the ₹7 lakh crore collected in FY18, its first year. April 2025 also marked the highest-ever monthly collection of ₹2.37 lakh crore, reflecting strong domestic consumption and improved compliance.
Notably, April 2025 alone saw the highest-ever monthly GST collection of ₹2.37 lakh crore — a testament to both consumption strength and tax enforcement effectiveness.
Taxpayer Base Doubles, Returns Soar
GST has seen a massive jump in taxpayer registrations. In the initial 23 days post-launch in 2017, 78 lakh taxpayers had signed up. As of May 2025, that number has more than doubled to 1.52 crore active taxpayers – growing at a compounded annual rate of 9%.
Over 162 crore GST returns have been filed in these eight years, reflecting a tax culture that is now digitally integrated and transparent.
Digital-First Tax System: Compliance Meets Convenience
A cornerstone of GST’s success is its end-to-end digital architecture. From e-invoicing to e-way bills and automated return filing, the system has made tax compliance seamless. The introduction of dynamic QR codes, simplified return formats, and biometric-based Aadhaar authentication for registration has helped plug revenue leakages and made life easier for small businesses.
As a result, compliance costs have reduced significantly. Small taxpayers with turnover up to ₹5 crore now have to file returns only once in a quarter. The simplified composition scheme allows service providers (turnover up to ₹50 lakh) to pay just 6% tax with minimal paperwork.
MSMEs See Gains from Higher Thresholds and Credit Access
Micro, Small and Medium Enterprises (MSMEs) — the backbone of India’s economy — have reaped the benefits. The GST exemption limit was doubled from ₹20 lakh to ₹40 lakh for goods, reducing compliance burden. The Trade Receivables Discounting System (TReDS), integrated with GSTN, has enabled financing access for thousands of small units, with over 5,000 buyers and 66 financiers (banks/NBFCs) onboard as of May 2024.
The TReDS is a digital platform that enables MSMEs to access working capital by auctioning their invoices to banks and NBFCs.
Logistics and Efficiency: India Moves Faster
The removal of inter-state checkposts has transformed India’s supply chain landscape. According to the Economic Survey 2023–24, truck haul distances rose from 225 km to 300–325 km per day, while transport time improved by 33%. India’s rank in the World Bank’s Logistics Performance Index jumped from 44 (2018) to 38 (2023).
The GST reform also played a role in India’s meteoric rise in the World Bank’s Ease of Doing Business rankings, from 142 in 2014 to 63 in 2019.
Academic Validation: GST Drives GDP Growth
According to a research note by the central government, there is a robust correlation (R = 0.86) between GST revenue growth and GDP expansion. A 1% increase in GST revenues translates into a 0.56% rise in GDP. With over 70% of GDP variance explained by GST revenue patterns, the tax is emerging as a leading economic indicator.
GST Council’s Key Decisions: From Green Mobility to Real Estate
The GST Council has evolved from a policy-making body into a dynamic platform for agile decision-making. Key interventions include:
Real Estate Relief: GST on affordable housing slashed from 8% to 1%.
Green Push: Tax on electric vehicles reduced from 12% to 5%, and zero tax on larger electric buses.
COVID Relief: Rate rationalisation on medical goods during the pandemic.
Dispute Resolution: GST Appellate Tribunals established, with a Principal Bench in Delhi and state benches rolling out.
E-Invoicing: Now mandatory for businesses with turnover above ₹5 crore; pilot for B2C launched.
Cooperative Federalism: From Fragmentation to Unity
Prior to GST, states levied varying VAT rates, distorting markets. Under GST, tax rates are set uniformly by the GST Council, enabling fair competition and a level playing field.
Fiscal federalism has strengthened. From FY19 to FY24, states would have earned ₹37.5 lakh crore under pre-GST taxes. Under GST, they collected ₹46.56 lakh crore — a gain of nearly ₹9 lakh crore. Tax buoyancy (revenue responsiveness to GDP growth) improved from 0.72 pre-GST to 1.22 during FY18–FY23.
What Still Needs Fixing
Despite its progress, GST continues to grapple with a few persistent challenges:
Rate Rationalisation: Although the number of goods in the highest 28% slab has come down from 227 to 35, further simplification is on the anvil.
Litigation Load: The need for a fully functional Appellate Tribunal system remains urgent, especially as compliance disputes grow.
Refund Delays: Exporters and MSMEs often cite delays in input credit refunds, affecting working capital.
Sectoral Concerns: Key sectors like petroleum, electricity, and real estate (for land) remain outside GST’s ambit, limiting its reach.
The Road Ahead
With over 85% of respondents in the Deloitte GST@8 Survey citing positive experiences — especially in ease of compliance and input tax credits — the focus now shifts to GST 2.0. Policymakers are expected to push for:
A simplified three-rate structure
Inclusion of petroleum and electricity under GST
Streamlined dispute resolution with operational tribunals
Greater integration with direct tax data for audit trails
Continued digital innovation and AI-based compliance checks
A Work in Progress, But a Job Well Begun
In eight years, GST has transformed how India taxes, trades, and transacts. From enhanced revenues and reduced costs to increased taxpayer trust and improved compliance — it is no longer just a tax reform, but a symbol of how governance can evolve with scale and speed.
As Prime Minister Narendra Modi once said in his Mann Ki Baat address in July 2017:
“Someday, the pundits of economics and technology will write about India’s GST experiment as a model for the world.”
Eight years on, that prediction is fast turning into reality.
