What Milestone Has GST Achieved in Its 8th Year?

New Delhi, June 30 (NationPress) The Goods and Services Tax (GST), recognized as one of the most significant economic transformations in post-Independence India, will mark its eighth anniversary on Tuesday. This milestone coincides with collections reaching an impressive Rs 22.08 lakh crore in the fiscal year 2024-25, reflecting a year-on-year increase of 9.4 percent, while the number of taxpayers has surged beyond 1.51 crore.

At its inception on July 1, 2017, Prime Minister Narendra Modi described GST as “a groundbreaking legislation for New India.”

Eight years later, the statistics reveal a robust fiscal landscape for India.

The average monthly collection for 2024-25 stood at Rs 1.84 lakh crore, marking it as an exceptional year. In 2020–21, total collections were Rs 11.37 lakh crore, with an average monthly collection of Rs 95,000 crore.

The following year, collections increased to Rs 14.83 lakh crore, then to Rs 18.08 lakh crore in 2022–23. By 2023–24, GST collections reached Rs 20.18 lakh crore, indicating steady growth in compliance and economic activity.

A recent survey by Deloitte revealed that 85 percent of taxpayers reported a “positive experience with GST,” viewing it as a more streamlined and transparent tax system that has enhanced the Ease of Doing Business. This marks the fourth consecutive year of rising sentiment.

The 'One-Nation, One-Tax' initiative has simplified tax compliance, lowered business costs, and facilitated the seamless movement of goods across states.

GST consolidated various indirect taxes under one framework, replacing levies such as excise duty, service tax, and VAT. This initiative has effectively eliminated the cascading tax effect and fostered consistency within the tax system nationwide.

The Deloitte report titled GST@8 hailed the past year as exceptional for GST, crediting timely government reforms, clear taxpayer guidance, and continuous updates to the GST portal as key factors in this success. These initiatives have not only enhanced the Ease of Doing Business but also fortified the tax base.

As a consumer-friendly reform, GST places the end-user at the heart of the tax framework. The elimination of multiple taxes and improved compliance have led to a reduction in average tax rates. Registered taxpayers have increased from 60 lakh to approximately 1.51 crore, broadening the tax base and enabling the government to reduce rates on numerous essential items.

Items like cereals, edible oils, sugar, snacks, and sweets now enjoy lower tax rates. A study by the Finance Ministry found that GST has helped households save at least four percent on monthly expenses. Consumers are now spending less on everyday essentials.

Furthermore, GST has revolutionized the logistics sector. Long lines of trucks at state borders and corruption-ridden checkpoints have become relics of the past. Goods now traverse state lines more swiftly and freely.

Transport times have improved by over 33 percent, according to several studies. Businesses have reduced fuel expenses, and major highways are less congested.

GST has provided significant relief to micro, small, and medium enterprises. Previously, the compliance thresholds under VAT and other state taxes were quite low, making it challenging for small businesses.

GST addressed this issue by establishing a higher exemption limit. Initially set at Rs 20 lakh, the threshold for goods was later raised to Rs 40 lakh, giving much-needed relief to many small traders and manufacturers.