Date: July 1, 2025Context: India marks the 8th anniversary of the Goods and Services Tax (GST) regime, launched on 1st July 2017 , unifying the country’s indirect tax system.
Background of GST GST subsumed over 17 Central and State indirect taxes and 23 cesses into a single unified tax . Enforced under the 101st Constitutional Amendment Act, 2016 . Aimed to establish a common national market , improve tax compliance, and eliminate cascading effects. India follows a dual GST model :CGST (Central GST)SGST/UTGST (State/UT GST)IGST (Interstate GST) Key Achievements in 8 Years Record GST collections :FY 2024–25 saw ₹20 lakh crore+ collected (as per provisional estimates). Monthly average collection crossed ₹1.8 lakh crore in 2025. Widened Tax Base : From ~65 lakh taxpayers in 2017 to over 1.45 crore in 2025. E-way bill system & e-invoicing boosted compliance. Taxpayer grievance redressal through GSTN portal improved. Logistics & warehousing benefited from reduced check-post delays. Current Challenges Challenge Details Fuel Exclusion Petroleum products (petrol, diesel, ATF, crude oil, natural gas) still outside GST , leading to cascading taxes. Multiple Rate Slabs Complex structure: 5%, 12%, 18%, 28% + special cesses. Experts demand rationalization to 2 or 3 slabs. State Compensation Post-2022, Centre stopped compensation; many states have demanded reinstatement. Compliance Burden Small businesses face challenges despite simplified forms. IT system glitches Despite improvements, technical issues remain in return filing.
Recent Recommendations 15th Finance Commission : Advocated review of tax slabs and inclusion of fuel under GST.Taxation experts : Suggest bringing real estate, alcohol and fuel gradually into GST ambit to ensure uniformity.NIPFP & CEPR Studies : Emphasize reducing 28% slab and merging 12% & 18% for better compliance and growth. Government Stand Centre’s View : Open to slab rationalization; formed GoM (Group of Ministers) in 2023 for this.States’ Concerns : Fear loss of autonomy and revenue from fuel/alcohol taxation.UPSC Relevance Paper Relevance GS III Economic Development → Inclusive growth, Tax reforms GS II Federalism → Centre-State fiscal relations Prelims Constitutional Amendment (101st), GST Council (Art 279A), tax structure
Way Forward Fuel inclusion could reduce price volatility, ensure seamless credit.Simplifying slabs would ease compliance, reduce disputes.Strengthening GSTN will improve taxpayer services and analytics.
