New Delhi: GST has marked a major shift in India’s indirect tax system by replacing fragmented central and state taxes with an integrated framework. It has helped create a common national market and support the vision of One Nation, One Tax. Since its implementation in 2017, GST has evolved through continuous reforms, digital systems and stronger Centre-State coordination. The Next-Generation GST reforms of 2025 further simplified the structure through lower rates, exemptions and easier processes. These measures aim to benefit households, MSMEs, farmers, artisans, exporters and various trade sectors.
GST: A Milestone in India’s Tax Reform Journey
The launch of Goods & Services Tax (GST) on 1st July 2017, marked a historic achievement in India’s reform journey. The principle of “One Nation, One Tax” has now become a reality, helping India move towards an integrated tax system.
Over the past nine years, GST has strengthened India’s vision of ‘Ek Bharat – Shreshtha Bharat’. It has brought transparency, accountability and economic growth through rationalised tax rates and standardised procedures.
GST subsumed 17 different taxes and 13 cesses into a common framework. Earlier, India’s indirect tax system included several Central and State-level taxes, creating differences in rates and structures. This added hidden costs for trade & industry and led to cascading of taxes, often described as “tax on tax”. Also, supported by a strong IT infrastructure, it aimed to broaden the tax base and improve tax discipline.
Salient features of GST
The structure of GST brought together several key features defining how the tax would be levied and administered.
Applicability: Under GST, tax is charged on the “supply” of goods or services, rather than on manufacture, sale or service separately.
Destination-based Consumption Tax: GST is a destination-based consumption tax. This means the tax accrue to the State where the goods or services are finally consumed.
Coverage and uniformity: It applies to almost all goods and services, with alcoholic liquor for human consumption kept outside its scope. It also brings greater uniformity by applying common tax rates across the country. There are 5 goods on which GST can be levied as and when approved by the GST Council.
GST Council: The Council guides key decisions on GST and supports its implementation across the country.
Building co-operative federalism: The GST Council has strengthened co-operative federalism by bringing the Centre and States together in decision-making. It is a statutory body that has played an important role by regularly reviewing issues and responding to emerging challenges. This flexible approach has allowed timely changes and course corrections in the tax system to support the economy.
Goods and Services Tax Network (GSTN): GSTN, a 50% Centre: 50% State Government owned company, provides the common digital infrastructure for the GST system. It supports the Centre, States, taxpayers and other stakeholders by enabling various digital services.
Dual GST: GST follows a dual structure where Centre levies Central Goods and Services Tax (CGST) and States levy State Goods and Services Tax (SGST) on intra-state supplies. Integrated Goods and Services Tax (IGST) is levied on all inter-State supply of goods and services. IGST rates are generally 2x CGST/SGST.
The 56th meeting of the GST Council approved the Next-Gen GST reforms to improve the lives of common people and simplify tax processes for businesses. The reforms revised rates and exemptions, which came into effect from 22nd September 2025. Hailed as GST 2.0, these reforms mark a new phase of tax reform that reinforce growth prospects. Gross GST collection stood at around ₹7.4 lakh crore in 2017-18 and has increased steadily over the years. Over the last five years, collections rose from ~₹13.76 lakh crore in 2021-22 to ~₹22.27 lakh crore in 2025-26. The momentum has continued into 2026-27, with GST collections reaching around ₹4.37 lakh crore during April-May 2026.
