How is GST 2.0 Transforming Taxation in India Under PM Modi’s Leadership?

New Delhi, Sep 3 (NationPress) During the pre-GST period, known as the VAT era, there was a lack of uniform tax rates, and states levied additional charges like entry tax, which hindered the process of harmonisation. Inconsistencies in tax returns, audits, and penalties across different states led to significant compliance challenges. Ineffective input tax credit provisions facilitated misuse, while the absence of central oversight resulted in tax evasion.

Issues such as double taxation with service tax, constant rate fluctuations, and varying tax structures created market distortions. Consequently, GST was introduced in 2017 after extensive negotiations with state authorities.

Celebrating its 8th anniversary on July 1, 2025, GST fulfilled its goal of 'One Nation, One Tax', successfully integrating India into a cohesive market, enhancing interstate commerce, and eliminating multiple layers of cascading taxes.

A recent survey by Deloitte revealed that 85% of participants, including MSMEs, expressed satisfaction with the GST implementation.

The new structure has simplified tax regulations, boosted industry competitiveness, and directly benefitted citizens by ensuring consistent tax rates nationwide and unified compliance procedures.

The GST taxpayer base surged from 6.65 million in 2017 to 15.1 million in 2025, showcasing a significant formalisation of the economy.

In FY 2024-25, total GST collections reached ₹22.08 lakh crore, doubling within just four years and achieving a compound annual growth rate (CAGR) of over 18%.

Increasing collections and a growing number of active taxpayers highlight improved compliance, enhanced systems, and the resilience of India's economy. The average revenue for this fiscal year stands at ₹2,04,500 crore, compared to ₹82,000 crore in FY 2017-18.

The upcoming GST 2.0 reforms aim to prioritise the ease of living for citizens, support sectors of economic growth, and simplify processes for businesses.

This initiative aims to spark a new cycle of growth, revitalising key economic sectors, leading to lower consumer prices and increased government revenue.

During the 56th GST Council meeting on Wednesday, reforms were approved with a focus on multi-sectoral improvements aimed at enhancing the lives of citizens and facilitating ease of doing business for all, particularly small traders and entrepreneurs. The rationalisation of rates was approved with attention to the common man, labour-intensive sectors, agriculture, and health, which are vital economic drivers, according to the Finance Ministry.

The ministry also announced the exemption of GST on all individual life insurance policies, including term life, ULIPs, or endowment policies, along with reinsurance, to make insurance more affordable for the general populace and increase insurance coverage across the nation.