Key Points

There was no consistency in tax returns, audits, or penalties across states, causing compliance burdens. Weak input tax credit provisions enabled misuse, while a lack of central oversight allowed evasion.

Double taxation with service tax, frequent rate changes, and differential structures created distortions. Therefore, GST was brought in 2017, after convincing the states.

GST marked its 8th anniversary on July 1, 2025, achieving its vision of ‘One Nation, One Tax’. It unified India into a single market, streamlined interstate trade, and removed multiple layers of cascading taxes.

A recent Deloitte survey concluded that 85 per cent of respondents, including MSMEs, are happy with the GST implementation.

The system simplified tax structures, made industry more competitive, and directly benefited citizens through uniform rates across the nation and unified procedures for compliance and enforcement.

The GST taxpayer base grew from 66.5 lakh in 2017 to 1.51 crore in 2025, indicating greater formalisation of the economy.

FY 2024–25 saw gross GST collections of Rs 22.08 lakh crore, doubling in just four years and growing at a CAGR of over 18 per cent.

Rising collections and active taxpayers reflect growing compliance, improved systems, and the strength of India’s economy. Average revenue in this fiscal year is Rs 2,04,500 crore compared to Rs 82,000 crore in FY 2017-18.

The GST 2.0 reforms will prioritise easing the lives of citizens, supporting economic growth sectors, and simplifying structures for businesses.

This means kick-starting a fresh virtuous cycle of stimulating growth and reinvigorating key economic sectors, which will ultimately result in lower prices for consumers and higher revenue for the government.

The 56th meeting of the GST Council on Wednesday approved reforms with a multi-sectoral and multi-thematic focus on improving the lives of all citizens and ensuring ease of doing business for all, including small traders and businessmen. The rate rationalisation was okayed with a focus on the common man, labour-intensive Industries, farmers and agriculture, health, which are key drivers of the economy, the Finance Ministry said.

"Exemption of GST on all individual life insurance policies, whether term life, ULIP or endowment policies and reinsurance thereof to make insurance affordable for the common man and increase the insurance coverage in the country," the ministry added.

- IANS