GST has entered ninth year of its existence in India on 1st July, 2025 as it completed eight years. If one has to sum-up status of GST today, it can be easily said that GST has certainly helped businesses / economy / revenue but it still remains a work-in-progress on many counts. Input tax credit, refund processing, no appellate functioning in absence of Tribunals, parallel tax administration, multiple that rates etc are some major bottlenecks which is blocking it to become a matured tax law.
GST after 8 years is all set for next level of reforms. Rate rationalization is one of the prime reform on the radar which may include merging of at least two slabs of 18% and 12% to one, may be 15%. Withdrawal of compensation cess and reworking on state revenues are yet another fixation issue post March, 2026. Few items which are out of GST net also need a relook to bring them under GST ambit. GST net of refund now fetch about Rs. 20 trillion to the exchequer which is three times of pre-GST collection.
Eight years after its launch, the Goods and Services Tax has firmly established itself as one of India’s most important economic reforms. It replaced a complex web of indirect taxes with a unified system that is simpler, fairer and more efficient. GST has helped create a common national market, reduced the cost of doing business and brought greater transparency to the tax system.
8 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
- Reduced corruption
- Systematic registration process
8 Pains
- Distorted input tax credit
- Too much and too frequent compliances
- Old mindset of officers
- Lack of trust between tax collectors and tax payers, important pillars of economy
- No appellate tribunal yet
- Multiple tax slabs
- Lack of coordination between various limbs of GST Administration
- Parallel jurisdiction
8 Challenges
- Interpretational issues
- Increased litigation and setting up independent appellate forum
- Alternative for compensation to states
- Fake invoices menace and rampant tax evasion
- Corruption
- Divergent advance rulings
- Levy of GST on petroleum products / electricity
- Technical glitches
8 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
8 Suggestions
- 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 reforms in GST rates and procedures
- Extensive Training to Tax Administration Staff
8 most litigated issues in GST in last eight years
- 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%
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