Dipak Kurmi
(The writer can be reached at dipakkurmiglpltd@gmail.com.)
As India marks the eighth anniversary of the Goods and Services Tax (GST) on July 1, 2025, the narrative surrounding this landmark fiscal reform has undergone a profound transformation. What began in 2017 as a bold yet contentious overhaul of India’s complex indirect tax system has now evolved into a cornerstone of the country’s economic framework. The journey from scepticism to widespread industry endorsement reflects not only the policy’s inherent resilience but also India’s growing capability to implement large-scale systemic reforms in a federal democracy.
The GST rollout on July 1, 2017, replaced a fragmented web of central and state levies with a unified, technology-driven, and transparent tax structure. It was envisioned as a tool to streamline tax administration, curb tax evasion, eliminate the cascading effect of taxes, and improve interstate trade flow. Over the past eight years, this single reform has fundamentally altered the landscape of tax compliance, business operations, and public finance in India.
According to the latest Deloitte survey titled “GST@8: Learning from the Past, Defining the Future”, industry sentiment has shifted dramatically. An overwhelming 85 per cent of industry respondents now view GST in a positive light—up from 59 per cent in 2022. This remarkable turnaround is not merely a statistic; it is an endorsement of the regime’s maturing governance, adaptability, and responsiveness to ground realities. The survey also highlights that nearly half of all respondents acknowledged the government’s proactive approach in issuing timely clarifications and taxpayer-friendly circulars. This shift signals the emergence of a more collaborative relationship between tax authorities and businesses—a hallmark of responsive and participatory governance.
One of the defining features of GST’s success story has been its deep digital integration. E-invoicing mechanisms, auto-populated returns, and the real-time tracking of goods movement through e-way bills have significantly reduced manual interventions and compliance ambiguities. The government’s push for digital transformation within the tax administration has not only enhanced transparency but also fortified audit trails, curbed revenue leakages, and improved taxpayer experience.
The impact of GST extends well beyond the corridors of tax departments. It has emerged as a critical enabler of economic efficiency and growth. The dismantling of interstate tax barriers has created logistics efficiencies, reduced transit times, and lowered operational costs for businesses across manufacturing, fast-moving consumer goods (FMCG), and e-commerce sectors. These microeconomic gains have had tangible macroeconomic effects—contributing directly to GDP growth, enhancing India’s global competitiveness, and facilitating supply chain optimization on an unprecedented scale.
Small and medium enterprises (SMEs), often considered the backbone of the Indian economy, have been significant beneficiaries of this transformation. The formalisation of the economy, driven by invoice matching and credit linkages, has empowered SMEs to integrate seamlessly into organised supply chains. This has improved their creditworthiness, market access, and participation in national and international trade networks. According to the Deloitte survey, 82 per cent of MSME respondents now express a positive experience with GST compliance—an impressive endorsement considering the initial apprehensions many small businesses had during the early years of implementation.
Government initiatives like the Quarterly Return Monthly Payment (QRMP) scheme, which allows quarterly return filing with monthly tax payments, have further eased the compliance burden on smaller enterprises. Additionally, the reduction of Tax Collected at Source (TCS) rates, simplified registration processes, and streamlined investigation and audit guidelines have deepened grassroots economic participation. These measures resonate with the broader policy vision of Atmanirbhar Bharat, enabling domestic enterprises to scale up and formalise their operations with confidence.
Another testament to GST’s growing effectiveness has been the steady increase in revenue collections. Monthly GST revenues have crossed the Rs 2 lakh crore mark on multiple occasions, signalling both improved compliance and the underlying resilience of the Indian economy. This revenue buoyancy has provided state and central governments with much-needed fiscal space to fund developmental programmes, especially at a time when global economic headwinds remain strong.
However, the journey so far has not been without challenges. Ground-level operational issues continue to plague taxpayers. Businesses still report bottlenecks like refund delays, Input Tax Credit (ITC) mismatches, and complex rate structures that create compliance hurdles and liquidity constraints. Overlapping audit mechanisms, protracted dispute resolution processes, and the lack of export liberalisation further compound the challenges.
Deloitte’s GST@8 survey highlights clear industry expectations for the next phase of reform—popularly termed ‘GST 2.0’. Industry stakeholders have prioritised several structural adjustments. Chief among these is the urgent need for rate rationalisation to eliminate inverted duty structures and reduce classification disputes. Simplifying audits and dispute resolution mechanisms is another widely shared demand, as businesses seek faster closure of legacy cases and fewer instances of parallel scrutiny by multiple tax authorities.
Exporters, in particular, are calling for the liberalisation of GST rules governing export refunds and credit accumulation. Many advocate the immediate removal of Input Tax Credit restrictions, which currently impact working capital and global competitiveness. Faster and more seamless registration and refund processes, especially for new businesses and MSMEs, are seen as essential to creating a more agile and business-friendly GST regime.
Moreover, there is growing consensus on the need for technology-driven dispute resolution mechanisms, possibly through online adjudication platforms. Such innovations could reduce litigation timelines and improve overall trust in the system. Policymakers are also being urged to strengthen the advance ruling mechanism and establish a clear appellate authority to address emerging jurisprudential gaps. Looking ahead, the next few years will be crucial in determining GST’s long-term role in India’s economic growth story. The GST Council, with its unique federal character, will have to walk a delicate line—balancing revenue considerations with the ease of doing business. Policymakers will need to prioritize the rationalisation of tax slabs, possibly moving towards a three-tier structure, and ensure seamless coordination between central and state tax administrations.
Beyond structural reforms, what GST@8 underscores is a larger narrative about India’s evolving fiscal governance ethos. The tax system is steadily shifting towards a more data-led, cooperative, and responsive framework. Artificial intelligence and big data analytics are already being deployed to flag discrepancies and fraud risks, while real-time dashboards now allow for more efficient tax monitoring and policy recalibration.
GST today is no longer viewed merely as a compliance obligation. It is increasingly seen as an enabler of economic growth, business expansion, and investment facilitation. Its role in promoting formalisation, driving revenue buoyancy, and strengthening fiscal federalism is widely acknowledged. The lessons learnt over the past eight years are guiding the development of GST 2.0—a regime that aims to be not just administratively efficient but also empathetic to the diverse needs of India’s vast business landscape.
In many ways, the story of GST mirrors India’s own economic evolution—from complexity and fragmentation towards scale, formalisation, and integration. The growing positivity reflected in the industry surveys shows that while the journey has been challenging, the destination remains desirable and within reach. As India aspires to become a $5 trillion economy and a global manufacturing hub, the continued refinement and strengthening of the GST framework will be central to achieving these ambitions.
Ultimately, GST@8 is not just a policy milestone. It is a reaffirmation of India’s capacity for transformative reform, collective governance, and economic resilience. The coming years will determine whether the GST system can fully deliver on its promise of creating a seamless, scalable, and sustainable tax ecosystem—one that empowers businesses, strengthens state capacity, and fuels India’s next phase of growth.