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India is no longer the economy it was in 2017. From rising to become one of the world’s top four economies to emerging as a hub for digital public infrastructure and start-up innovation, the last eight years have marked a transformational phase in India's growth story. Running parallel to this transformation, sometimes quietly and sometimes contentiously, has been the evolution of the Goods and Services Tax (GST). As GST completes eight years of implementation, it has become deeply embedded in the way India collects, measures, and interprets its economic activity. Whether enabling the real-time tracking of economic data, digitising compliance across supply chains, or reducing the cascading burden of taxes, GST has been both a fiscal lever and a tool for formalisation.
The numbers demonstrate its significant progress. In FY 2024–25, GST collections crossed the landmark figure of INR 20.18 lakh crore, with an average monthly collection of INR 1.68 lakh crore. The month of April 2025 saw the highest-ever single-month collection of INR 2.36 lakh crore, and May 2025 recorded INR 2.01 lakh crore. These aren't just revenue figures but reflect the deepening penetration of GST into India's consumption and production landscape. Importantly, the growth in GST revenues has outpaced nominal GDP growth, signalling not just economic expansion but increased compliance and reduced leakages.
GST has evolved into more than just a tax system; it has become a macroeconomic indicator. Policymakers increasingly rely on monthly GST trends to assess sectoral growth, business sentiment, and supply chain resilience. From transport logistics to retail consumption, GST footprints reflect ground-level economic behaviour.
One of the most defining shifts since GST's inception has been its digital backbone. The evolution from manual filings and tax computations to e-invoicing, real-time credit matching, automated return generation, and e-way bill systems has been transformational. The digitisation of compliance has not just improved accuracy but has changed behaviour. MSMEs, once skeptical of formalisation, now increasingly view GST as a gateway to credit, procurement eligibility, and national market access.
The reforms have not been limited only to technology. Procedural simplifications, like the introduction of an invoice management system, streamlining refund processing, and the registration process, are a step towards easing the business environment. The issuance of over 1,200 notifications, 250 circulars, and 600 advisories since 2017 reflects a system that is dynamic, responsive, and still evolving.
Equally integral to this adaptive framework is the judiciary's role in shaping GST jurisprudence. Landmark rulings, such as Mohit Minerals, VKC Footsteps, Safari Retreats, Dharmendra M. Jani, DY Beathel Enterprises, and the Gujarat Chamber of Commerce and Industry, have not only clarified statutory ambiguities but also served as vital interpreters of legislative intent to safeguard taxpayer rights. Importantly, these rulings have not existed in isolation. Many of them prompted circulars, policy amendments, or Council deliberations, reinforcing that the evolution of GST has been a dynamic interplay of law, practice, and feedback.
Yet, not all promises have been fully realised.
A key gap has been the delayed operationalisation of the GST Appellate Tribunal (GSTAT). Although finally notified, the benches in several states remain non-functional. Taxpayers continue to face uncertainty, with appeals piling up in High Courts and adjudication timelines stretching.
Similarly, the proposed rationalisation of GST rate slabs remains incomplete. The four-tier rate structure of 5%, 12%, 18%, and 28% was always meant to be transitional. Yet, despite expert committee reports and Council discussions, a move to a simplified three-rate system has not materialised. This has resulted in classification disputes, litigation, and working capital issues, especially in sectors prone to inverted duty structures.
Interpretational challenges persist in several areas. The taxation of intermediary services continues to generate divergent views, especially in export-oriented setups. Clarificatory circulars have helped, but litigation remains common. Services between distinct persons, employee secondment arrangements, have all seen varied interpretations, leaving businesses in a compliance grey zone.
Looking ahead, the next phase of GST's evolution must focus on integration and simplification. The convergence of data systems between GSTN, ICEGATE, DGFT, RBI, and MCA could revolutionise compliance. Including petroleum products and alcohol under GST remains essential for removing credit blockages and achieving true value chain efficiency.
Emerging areas, such as crypto-assets, carbon credits, and digital goods, will require careful classification and tax design. Policy responses here must be proactive and principle-based, not merely reactive.
To be fair, GST was never expected to be perfect from Day One. It was designed to be a living law that evolves with the economy, reacts to feedback, and matures through practice. And in many ways, that's exactly what it has done. But as we reflect on eight years of this ambitious reform, one thing is clear:
GST has come a long way, but its journey is far from over.
What it needs now is not just praise for what it has achieved but resolve to fix what still holds it back. Because a tax system doesn't just fund a nation's development, it reflects the kind of nation we want to become.
Shilpa Verma, Associate Director, Indirect Tax, Grant Thornton Bharat, has also contributed to this article.
This article first appeared in The Economic Times on 1 July 2025.