As the goods and services tax turns 10, it is becoming evident that reforms have broadened the tax base, increased compliance and raised the revenue bar. As the number of registered taxpayers has shot up from 66.5 lakh in July 2017 to 1.6 crore now, the average monthly revenue has risen from ₹89,700 crore to ₹1.85 lakh crore. Likewise, the annual haul jumped from ₹7.19 lakh crore in 2017-18 to ₹22.25 lakh crore in 2025-26. The data points reflect the increasing formalisation of the economy and improved tax compliance. Further, they suggest that monthly GST revenue is settling into a consistently higher trajectory from ₹1 lakh crore a few years ago to almost ₹2 lakh crore now. The consistency in collections not only reflects domestic economic resilience but also reasons against states’ concerns about revenue loss.
GST has undergone countless tweaks over the past nine years. But none was as significant as the launch of the so-called GST 2.0 last September that included a broad range of rate rationalisations. The move led to expansion in transaction values as well as household savings, thereby increasing consumption. This begs the question on why it took nine long years for the government to move from a four-tier structure to the current two slabs of 5 percent and 18 percent if higher revenue realisation was expected. Such a move would have eased the pressure on individuals during and after the pandemic. It’s puzzling to even imagine that critical items like health insurance had to wait its turn for the rate to go down. The hope is that, like in finance—where the first billion takes longer to crack than the next few ones—GST’s next phase of reforms would not take forever.
While refunds have drastically improved, unlocking liquidity for cash-strapped small businesses, there is ample scope to make them even faster. It should be a continuous effort. Similarly, further simplification of return filing, faster dispute resolution, broadening the base through the gradual inclusion of excluded sectors need attention. Taxpayers continue to be burdened with input tax credit issues and small businesses often face excessive pressure for compliance. The GST authorities must ensure that officials do not unduly exercise their sweeping search-and-seizure powers or increase the compliance cost for smaller enterprises, which are the lifeblood of the economy.
