GST at 9: Gains, Pains, Challenges and Way Forward

Summary: Nine years after its introduction on 1 July 2017, GST has emerged as India’s largest indirect tax reform while continuing to evolve through legislative, procedural, and technological changes. The journey has progressed through three phases—foundation, digital transformation, and intelligent administration—with milestones such as e-invoicing, Aadhaar authentication, AI-based scrutiny, the Invoice Management System (IMS), and the operationalization of the GST Appellate Tribunal (GSTAT). GST collections have consistently increased over the years, supported by a broader tax base and greater digital compliance. Key achievements include integration of indirect taxes, reduced cascading, increased transparency, online compliance, and improved revenue collection. However, challenges remain in the form of input tax credit issues, multiple tax slabs, frequent compliance requirements, litigation, fake invoices, portal glitches, conflicting advance rulings, and interpretational disputes. The article recommends taxpayer-friendly administration, seamless ITC, faster adjudication, GST rate rationalization, stronger Centre-State coordination, extensive training, and continued reforms to strengthen the GST framework.

GST @ 9 YEARS

Goods and Services Tax (GST) was introduced in India from the midnight of 30^th June – 1^st July, 2017 and has now completed nine years of its existence in India. This is one of the major tax reforms in India so far and is the biggest ever indirect tax reform.

GST has seen many ups and down in these nine years and is still considered to be a young, not so matured and yet an evolving indirect tax law in the country. Subsuming many small and big taxes in the GST, it has emerged as the biggest indirect tax law today. GST is still considered to be a tax law which can be said to be work-in-progress in terms of reforms, settlement of law for interpretation, understanding and implementation. The main federal body, GST Council has had more than 55 meetings so far in these 9 years. The major achievement of ninth year is constitution and commencement of functioning of GST Appellate Tribunal (GSTAT).

This piece offers a crisp recap of present status of GST as a tax law, major mile stones and interesting data around GST. It also raises signals about major challenges, strengths and opportunities GST faces or offers today.

 Average GST collection higher than pre-GST period

Tax to GDP Ratio *

*Pre-GST period data includes all subsumed taxes

3 phases of GST in 9 years

 Indirect Taxation in India- Then and Now

 9 Gains

• Integration of indirect taxes
• Online compliances
• Tax cascading reduced substantially
• Reduced physical interface with tax department
• Increased transparency in tax implementations
• Reduced transaction costs and unnecessary wastages
• GST Appellate Tribunal now functional
• Systematic registration process
• Wider tax base and higher revenue collection

9 Pains

• Distorted input tax credit
• Too much and too frequent compliances
• Old mindset and attitude of officers
• Multiple tax slabs
• No credit for inverted duty cases for services
• Lack of coordination between various limbs of GST Administration
• Parallel jurisdiction
• Lack of trust between tax collectors and tax payers, important pillars of economy
• Too complicated and messy GSTAT portal

 9 Challenges

• Interpretational issues
• Increased litigation and huge pendency in appeal matters setting up independent appellate forum
• Alternative for compensation to states
  • Fake invoices menace  and rampant tax evasion
  • Corruption
  • Conflicting  advance rulings by State authorities
  • Levy of GST on petroleum products / electricity
  • Technical glitches in portals
  • Frequent Amendments and Regulatory Changes

9 Opportunities

• Further comprehensive tax reforms
• Integration of economy and contribution to GDP
• Ease of doing business
• Buoyant tax collection
• Transparent, accountable and fair & just tax administration
• Expansion of tax base
• Increased direct & indirect employment
• Change in accounting practices
• AI-Driven tax administration and digital transformation of businesses

 9 Suggestions – way forward

• Change in attitude, mindset to be more taxpayer friendly
• Practical approach to handle taxpayers / non-compliances
• Make input tax credit smooth and seamless
• Offer fair tax grievance redressal mechanism
• Faster and unbiased adjudication
• Reduction in number of tax slabs / rates
• Prioritize further reforms in GST rates and procedures
• Extensive Training to Tax Administration Staff
• Implement a single national audit framework by ensuring centre and state co- ordination

9 most litigated issues in GST

• Fake invoices / frauds
• Detention and seizure of goods and conveyances
• Mis-match in GSTR-3B and GSTR-2A (Input tax credit)
• Investigation and search
• Arrests and Bail
• Transitional credit issues
• Cancellation & restoration of registration
• Interpretational issue : tax @12% or 18%
• Refunds and Export-Related Issues

Notifications and Circulars issued in 2025 / 2026 (18 months)  (Till 30.06.2026)

Milestones in GST in Retrospect w.e.f. 01.07.2025-2026