{"id":78145,"date":"2026-07-01T18:36:12","date_gmt":"2026-07-01T13:06:12","guid":{"rendered":"https:\/\/www.nextias.com\/ca\/?p=78145"},"modified":"2026-07-01T18:38:02","modified_gmt":"2026-07-01T13:08:02","slug":"nine-years-of-gst","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/current-affairs\/01-07-2026\/nine-years-of-gst","title":{"rendered":"Nine Years of GST"},"content":{"rendered":"\n<p><strong>Syllabus: GS3\/ Economy<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Context<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>On 1 July 2026, the Goods and Services Tax (GST) completed nine years since its rollout under the 101st Constitutional Amendment.\u00a0<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Nine Years of GST: Key Outcomes<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Formalisation of the Economy: <\/strong>GST has expanded India&#8217;s formal economic base. The number of registered taxpayers has increased from around <strong>66.5 lakh in 2017<\/strong> to nearly <strong>1.65 crore by May 2026<\/strong>.\u00a0<\/li>\n\n\n\n<li><strong>Strong Revenue Performance: <\/strong>Tax collections have grown steadily over the years. Gross GST revenue increased from approximately <strong>\u20b97.4 lakh crore in 2017\u201318<\/strong> to <strong>\u20b922.27 lakh crore in 2025\u201326<\/strong>.\u00a0<\/li>\n\n\n\n<li><strong>Towards a Unified National Market: <\/strong>By replacing <strong>17 different Central and State indirect taxes<\/strong>, GST created a common national market and substantially reduced the cascading effect of taxation which strengthen the idea of <strong>&#8220;One Nation, One Tax&#8221;<\/strong>.<\/li>\n<\/ul>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full is-resized\"><img data-dominant-color=\"f1f1f1\" data-has-transparency=\"true\" loading=\"lazy\" decoding=\"async\" width=\"858\" height=\"732\" src=\"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2026\/07\/image-7.png\" alt=\"nine years of gst: key outcomes\" class=\"has-transparency wp-image-78146\" style=\"--dominant-color: #f1f1f1; aspect-ratio:1.1721356153930012;width:348px;height:auto\" srcset=\"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2026\/07\/image-7.png 858w, https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2026\/07\/image-7-300x256.png 300w, https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2026\/07\/image-7-768x655.png 768w\" sizes=\"auto, (max-width: 858px) 100vw, 858px\" \/><\/figure>\n<\/div>\n\n\n<h2 class=\"wp-block-heading\"><strong>GST 2.0: Major Reforms<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Rationalisation of Tax Rates: <\/strong>Under this, the earlier four-rate system of <strong>5%, 12%, 18% and 28%<\/strong> has largely been consolidated into two principal slabs of <strong>5% and 18%.<\/strong>\n<ul class=\"wp-block-list\">\n<li>Also, a new <strong>40% rate<\/strong> has been introduced for luxury and demerit goods.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Household Relief:<\/strong>Essentials like UHT milk (tetra pack), paneer, roti, and erasers have been moved to Nil (0%) GST. Common household items like soap, toothpaste, kitchenware are placed in the 5% bracket.<\/li>\n\n\n\n<li><strong>Healthcare and Insurance:<\/strong> Life and health insurance products are GST-exempt, and rates on essential drugs and medical devices have been reduced.<\/li>\n\n\n\n<li><strong>Sectoral Support:<\/strong> GST 2.0 reforms specifically address the Inverted Duty Structure affecting key sectors.<\/li>\n\n\n\n<li><strong>Institutional Strengthening:<\/strong> The Goods and Services Tax Appellate Tribunal (GSTAT) become operational to enable faster dispute resolution.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Next-Gen GST: Benefits<\/strong><\/h2>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-full is-resized\"><img data-dominant-color=\"dce1e1\" data-has-transparency=\"true\" loading=\"lazy\" decoding=\"async\" width=\"678\" height=\"622\" src=\"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2026\/07\/image-8.png\" alt=\"next-gen gst\" class=\"has-transparency wp-image-78147\" style=\"--dominant-color: #dce1e1; width:360px;height:auto\" srcset=\"https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2026\/07\/image-8.png 678w, https:\/\/wp-images.nextias.com\/cdn-cgi\/image\/format=auto\/ca\/uploads\/2026\/07\/image-8-300x275.png 300w\" sizes=\"auto, (max-width: 678px) 100vw, 678px\" \/><\/figure>\n<\/div>\n\n\n<h3 class=\"wp-block-heading\"><strong>Challenges<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Revenue Foregone:<\/strong> Rate reductions could lead to a revenue loss of approximately \u20b948,000 crore on FY 2023-24 consumption base <em>(Finance Ministry)<\/em>, requiring compensatory base broadening.<\/li>\n\n\n\n<li><strong>ITC Removal Concerns:<\/strong> Removal of ITC on healthcare products and insurance could increase costs for businesses providing these services, partially offsetting consumer relief.<\/li>\n\n\n\n<li><strong>Petroleum Exclusion:<\/strong> Keeping petroleum outside GST perpetuates cascading tax effects on logistics and manufacturing, undermining GST&#8217;s core efficiency objective.<\/li>\n\n\n\n<li><strong>Transitional Compliance Burden:<\/strong> Despite rationalisation, businesses face pricing structure adjustments and billing system upgrades during transition, creating short-term operational complexity.<\/li>\n\n\n\n<li><strong>Concerns of States:<\/strong> Several states continue to express concerns over possible revenue losses following the end of the GST compensation mechanism and the latest rate rationalisation.\u00a0<\/li>\n\n\n\n<li><strong>Moderating Revenue Growth: <\/strong>Although GST collections continue to reach record levels in absolute terms, the pace of year-on-year growth has moderated. This has raised questions about the long-term sustainability of revenue buoyancy and the need to further widen the tax base.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>Way Forward<\/strong><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>AI Integration:<\/strong> Develop AI-driven invoice matching and real-time ITC verification to combat fake invoice fraud, protecting revenue without burdening compliant taxpayers.<\/li>\n\n\n\n<li><strong>Strengthen Cooperative Federalism:<\/strong> Sustained engagement through the <strong>GST Council<\/strong> remains essential for addressing state-level revenue concerns and ensuring that future reforms enjoy broad consensus.<\/li>\n\n\n\n<li><strong>Broaden the GST Base:<\/strong> Expanding the tax base would improve revenue buoyancy, simplify the indirect tax structure and move India closer to a truly comprehensive GST regime.<\/li>\n\n\n\n<li><strong>Faster Dispute Resolution:<\/strong> Fast-track GSTAT operationalisation across all 45 locations to resolve pending disputes and restore taxpayer confidence in the GST dispute resolution architecture.<\/li>\n<\/ul>\n\n\n\n<p>Source: <a href=\"https:\/\/www.pib.gov.in\/PressNoteDetails.aspx?NoteId=159075&amp;ModuleId=3&amp;reg=48&amp;lang=2\" target=\"_blank\" rel=\"noopener\">PIB<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p><strong> Context <\/strong><\/p>\n<li class=\"ms-5\"> On 1 July 2026, the Goods and Services Tax (GST) completed nine years since its rollout under the 101st Constitutional Amendment.\u00a0 <\/li>\n<p><\/p>\n<p><strong> Nine Years of GST: Key Outcomes <\/strong><\/p>\n<li class=\"ms-5\"> Formalisation of the Economy: GST has expanded India&#8217;s formal economic base. The number of registered taxpayers has increased from around 66.5 lakh in 2017 to nearly 1.65 crore by May 2026.\u00a0 <\/li>\n<li class=\"ms-5\"> Strong Revenue Performance: Tax collections have grown steadily over the years. Gross GST revenue increased from approximately \u20b97.4 lakh crore in 2017\u201318 to \u20b922.27 lakh crore in 2025\u201326.\u00a0 <\/li>\n<p><a href=\" https:\/\/www.nextias.com\/ca\/current-affairs\/01-07-2026\/nine-years-of-gst \" class=\"btn btn-primary btn-sm float-end\">Read More<\/a><\/p>\n","protected":false},"author":15,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-78145","post","type-post","status-publish","format-standard","hentry","category-current-affairs"],"acf":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/78145","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=78145"}],"version-history":[{"count":3,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/78145\/revisions"}],"predecessor-version":[{"id":78154,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/78145\/revisions\/78154"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=78145"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=78145"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=78145"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}