GST turns eight: Unified tax system delivers record ₹22 lakh crore collection

GST turns eight: Unified tax system delivers record ?22 lakh crore collection

India’s Goods and Services Tax (GST) will complete eight years since its rollout on July 1, marking a significant milestone in the country’s economic integration journey.

Introduced in 2017 to replace a maze of indirect taxes, GST was hailed by Prime Minister Narendra Modi as “a path-breaking legislation for New India.” Over time, the reform has reshaped tax compliance, improved business efficiency and bolstered government revenues.

In 2024–25, gross GST collections touched a record ₹22.08 lakh crore, registering a year-on-year growth of 9.4 per cent. This is more than double the ₹11.37 lakh crore collected in 2020–21, when average monthly collections stood at ₹95,000 crore. By contrast, the average monthly figure in 2024–25 has risen sharply to ₹1.84 lakh crore, reflecting both economic formalisation and improved compliance.

A recent report by Deloitte, titled GST@8, noted that the past year has been particularly strong for GST performance. The report pointed to government-led reforms, clearer guidelines for taxpayers and steady technological upgrades of the GST portal as key reasons for the record collection figures.

The tax structure itself is designed to balance simplicity with revenue needs. GST rates in India are distributed across four primary slabs: 5 per cent, 12 per cent, 18 per cent and 28 per cent. Special rates apply in select cases—such as 3 per cent on gold, silver and jewellery, 1.5 per cent on cut and polished diamonds and 0.25 per cent on rough diamonds. A GST Compensation Cess, levied on goods like tobacco products and aerated drinks, continues to support states facing revenue gaps post-GST transition.

Since its launch in July 2017, the number of active GST registrations has climbed significantly, reaching over 1.51 crore by April 30, 2025. This growth reflects greater tax base coverage and increased formalisation across sectors. Alongside this, the dual GST model—comprising Central GST (CGST), State GST (SGST) for intra-state transactions and Integrated GST (IGST) for inter-state trade—has ensured equitable revenue distribution between the Centre and states.

From ₹14.83 lakh crore in collections in 2021–22 to ₹18.08 lakh crore in 2022–23 and ₹20.18 lakh crore in 2023–24, the GST revenue trajectory underscores a steady rise in compliance and economic activity. Sector-specific exemptions, including those for healthcare and education, have kept essential services affordable, while digital compliance through the GSTN portal has simplified filing for businesses large and small.