Administrator
Inquiry revealed that advanced technology such as Artificial Intelligence, machine learning and Data Analytics (DA) are being used in auto mode for monitoring in a more targeted manner. In effect, scope to evade GST has almost disappeared, claim analysts.
These AI and Data Analytics tools have been applied across various processes such as registration, scrutiny, collection, notification, imposition, collection oof fine/ penalty and so on.
Experts opine that this high tech use in GST set up allows the system to focus on the high- risk tax payers, while easing regulatory requirements on complaint tax payers.
Importantly, the impact of these measures extends beyond improving administrative efficiency and understood to have supported India’s broader macroeconomic stability.
They have made collections more predictable, thereby supporting stronger revenue buoyancy and greater fiscal transparency, said a GST observer not willing to disclose his identity.
Formalisation Gains Reflect in GST Growth
GST collections have become a high-frequency signal of economic activity. Rising revenues reflect not only higher consumption and trade, but also a wider taxpayer base, stronger reporting systems and better compliance.
The number of GST taxpayers increased from 66.5 lakh in 2017 to 1.65 crore as on May 2026. This points to greater formalisation of the economy.
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.
The launch of Goods & Services Tax (GST) on 01st 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.
Next-Generation GST Reforms
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.
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