On July 1, 2017, India undertook one of its most significant tax reforms with the introduction of the Goods and Services Tax (GST), replacing a complex web of indirect taxes levied by the Centre and States. It aimed to unify the domestic market, streamline compliance, and enhance transparency in taxation. Eight years down the line, Indian businesses—big and small—have navigated through its evolving structure, compliance mandates, and technological shifts. The journey has been both challenging and transformative.
Here are eight key lessons Indian businesses have learned from eight years under the GST regime:
Compliance is a continuous responsibility, not a one-time task
One of the most critical takeaways for businesses is that GST compliance is not confined to periodic filings alone. With multiple monthly and annual returns such as GSTR-1, GSTR-3B, GSTR-9, and GSTR-9C, along with reconciliation requirements and audit trails, businesses have realized the importance of sustained attention to compliance. Moreover, the real-time matching of invoices for Input Tax Credit (ITC) claims has made accuracy in record-keeping non-negotiable. Businesses must invest in ERP systems or GST software to manage compliance proactively, rather than reactively responding to notices and mismatches.
Technology adoption is no longer an option
GST is fundamentally a technology-driven reform. The GST Network (GSTN) is an IT backbone that requires digital filings, real-time invoice uploads, e-way bill generation, and now e-invoicing for specified turnover brackets. This has rendered manual book - keeping no longer sustainable, pushing even traditionally non-digital businesses, especially in the MSME sector, to adopt software tools and automate their financial processes. The shift from manual accounting to digital workflows has not only improved compliance but also operational efficiency and transparency.
Input tax credit is a right, but only with proper documentation
GST introduced the seamless flow of ITC as one of its cornerstone promises. However, businesses have learned that ITC is not automatic. To avail credit, compliance of both the supplier and the recipient is essential. Delayed or incorrect filing by a supplier can block ITC for the buyer. Further, businesses must ensure possession of tax invoices, receipt of goods or services, actual payment of tax to the government, and matching of data in the GST portal. The practical lesson is: due diligence on vendor compliance is crucial for protecting working capital.
Classification and valuation are critical to avoid disputes
The classification of goods and services under the correct Harmonized System of Nomenclature (HSN) or Services Accounting Code (SAC) remains a frequent area of litigation. A minor error in classification can lead to differential tax rates, resulting in tax shortfalls, interest, and penalties. Valuation disputes have also arisen, especially in cases involving related-party transactions, discounts, or bundled supplies. Over the years, businesses have come to recognize that meticulous classification and accurate valuation are not just technical requirements but essential safeguards against tax disputes. Regular internal reviews, supported by expert guidance, have become vital to ensuring compliance, minimizing risk, and maintaining consistency in tax treatment.
GST audits & notices are not just formalities
Many businesses initially viewed GST assessments and audits as routine exercises. However, it became clear that the scrutiny was detailed and data-driven. Minor mismatches—such as between GSTR-1 and GSTR-3B, or GSTR-3B and GSTR-9—often triggered queries and notices.
This led businesses to build robust internal processes for monthly reconciliations, error tracking, and audit preparedness. Today, GST audit readiness is considered a part of overall enterprise risk management, and businesses have developed detailed SOPs for responding to departmental communications.
Cross-state operations demand better business planning
Under GST’s destination-based taxation, businesses operating across states had to reassess their tax strategies. Earlier, a company might have operated through centralized billing; under GST, multi-state registration became necessary for physical presence or supply.
This led to a reevaluation of supply chains, warehouse locations, and logistics costs. Businesses learned that operating in multiple states required state-wise compliance, including separate returns, audits, and reconciliations. As a result, organizations have moved towards more structured business planning and improved internal controls.
Government policy is dynamic, businesses must stay updated
The GST framework has undergone numerous amendments over the years—be it changes in rates, procedural tweaks, or clarifications through circulars and notifications. Initially, businesses found it difficult to keep pace.
Those who didn’t update their systems or practices suffered compliance lapses. Today, companies recognize that regulatory monitoring is a critical function. Many have adopted subscription-based legal update services, conduct monthly GST briefings, and invest in regular training programs for their teams.
Chartered accountants evolved into strategic enablers
The GST regime has transformed the role of Chartered Accountants from traditional compliance officers to trusted strategic partners. Today, they advise businesses on tax planning, refund structuring, and audit preparedness. Their insight is especially vital in sectors like manufacturing and exports, where accurate ITC claims and timely refunds directly affect liquidity.
(The author Rajat Mohan is a Senior Partner at AMRG & Associates)