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Eight years since its launch, the Goods and Services Tax (GST) has proven itself to be one of the most transformative reforms in India’s fiscal history. Introduced on 1 July 2017, GST unified India’s fragmented indirect tax ecosystem into a single, destination-based tax structure. Initially met with uncertainty, GST has since evolved through robust policy interventions, growing in resilience and adaptability. GST@8 has now catalysed a paradigm shift—not just in tax administration but also in how businesses operate across states.
With over 55 GST Council meetings, 1,200+ notifications, and rising contributions to the tax pool, GST is now more than a tax—it is a pillar of India’s economic integration. The reforms under the GST policy evolution have streamlined compliance, stabilised revenue flows, and encouraged manufacturing across the country, marking a quiet but powerful shift in the nation’s economic fabric.
In April 2025, GST collections reached an all-time high of INR 2.36 lakh crore—up 12.6% from the previous year, signalling strong economic recovery.
GST as a percentage of GDP has risen steadily, reflecting robust tax buoyancy and enhanced integration across states.
The system has seen consistent growth in taxpayer base, with over 1.52 crore registered taxpayers and 161 crore returns filed till May 2025.
Technology adoption has been massive, with 2,431 crore invoices uploaded and 619 crore e-way bills generated on the GSTN platform.
GST’s contribution to India’s net tax collections has climbed from 23% in FY18 to over 27.5% in recent years.
High-performing states like Maharashtra, Gujarat, Karnataka, and Uttar Pradesh continue to anchor national GST performance.
GST@8 has matured significantly through digital, legal, and structural advancements. Notable GST developments include e-invoicing, the Invoice Management System (IMS), and simplified return filing—all aimed at reducing evasion and increasing compliance. The Amnesty Scheme has also emerged as a balanced move to encourage taxpayer participation while tightening enforcement.
On the legislative front, the Finance Act 2024 introduced Section 74A, standardising adjudication timelines for fraud and non-fraud cases. The launch of the GST Appellate Tribunal (GSTAT), with multiple state benches and a centralised structure, marks a step towards reducing litigation and improving access to justice.
A critical change involves making the Input Service Distributor (ISD) registration mandatory from April 2025. This mandates formal ITC distribution for inter-entity services, bringing clarity and uniformity in compliance practices.
Furthermore, multiple clarifications have been issued, including on ITC for demo vehicles, GST applicability on vouchers and loans, and the tax treatment of extended warranties. These developments reflect an increasing emphasis on transparency, automation, and credit alignment under GST.
Over the past year, the judiciary has played a key role in clarifying contentious GST issues and has helped shape GST policy evolution. The Supreme Court’s ruling in the Safari Retreats case upheld Section 17(5)(d) but allowed ITC on 'plant' based on functionality, shaping future interpretation of construction-related credits. A retrospective amendment followed, aligning the statute with judicial observations.
Further relief came when the SC allowed the use of ITC for mandatory pre-deposits in appeals and upheld rectification of GST returns beyond statutory deadlines, strengthening procedural fairness for taxpayers.
The court also validated GST’s arrest provisions under the CGST Act, affirming that enforcement powers fall within legislative competence. Meanwhile, the Delhi HC held telecom towers as movable assets eligible for ITC, while the Gujarat HC exempted leasehold right assignments from GST.
Lastly, the Kerala HC struck down the imposition of GST on club-to-member services, reinforcing the principle of mutuality. With the operationalisation of GSTAT underway, these rulings underscore the evolving, yet maturing, judicial framework of GST.
Potential merger of the 12% and 18% slabs to simplify the tax structure.
Bringing petrol, diesel, ATF, and natural gas under GST remains a long-pending reform.
Delays in tribunal functioning continue to hinder the speedy resolution of appeals.
A lack of clarity in classification continues to create confusion for cross-border service providers.
Section 17(5) amendments and the ‘own account’ clause are ripe for judicial review.
The status and rate of GST on digital assets remain undefined, causing compliance uncertainty.
Across sectors, specific GST proposals aim to address long-standing challenges. In healthcare, a rate reduction on equipment is recommended. In banking, clarity is sought on co-lending arrangements between NBFCs and banks.
Real estate players have called for ITC on the construction of immovable property, while the insurance sector proposes reducing GST on premiums to 5%. Renewable energy projects seek revised valuation norms and clarity on EV infrastructure.
Sectors like hospitality, crypto, and textiles urge tax alignment and refunds to remain globally competitive, showing the system’s readiness for sector-wise fine-tuning.
Amnesty scheme under Section 128A for waiver of interest and penalties.
Launch of the Invoice Management System (IMS) for ITC reconciliation.
Ongoing disputes around online gaming valuation and classification.
Section 74A standardising fraud and non-fraud adjudications.
SC verdict in Safari Retreats on ITC for construction activities.
As India journeys toward becoming a developed economy by 2047, GST will remain central to this transition. GST is now deeply embedded in the country’s fiscal architecture, from record-breaking revenue milestones to the rollout of AI-based tools. The foundation is strong, while challenges remain, including slab rationalisation and tax base expansion. The resilience shown by both taxpayers and administrators reaffirms that GST is more than a reform—it’s a dynamic engine for growth, compliance, and inclusion in India’s economic future.
