GST completes 8 years with record Rs 22 lakh crore collection in FY25

The ‘One Nation, One-Tax’ was launched by Prime Minister Narendra Modi on July 1, 2017

New Delhi:The Goods and Services Tax (GST), widely hailed as one of the biggest economic reforms in post-Independence India, will on Tuesday complete eight years of its success story, with collections soaring to a record Rs 22.08 lakh crore in 2024-25, marking a year-on-year growth of 9.4 per cent, with the number of taxpayers in its ambit surging past 1.51 crore.

Prime Minister Narendra Modi had called GST path-breaking legislation for New India at its launch on July 1, 2017. Eight years on, the numbers speak for themselves, reflecting India’ s strong fiscal position.

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The average monthly collection stood at Rs 1.84 lakh crore in 2024-25, a blockbuster year. In 2020-21, the total collection was Rs 11.37 lakh crore, with a monthly average of Rs 95,000 crore.

The following year, it rose to Rs 14.83 lakh crore, and then to Rs 18.08 lakh crore in 2022-23. In 2023-24, GST collections reached Rs 20.18 lakh crore, showing consistent growth in compliance and economic activity.

According to a Deloitte survey, 85 per cent of taxpayers have reported positive experience with GST and view it as a more simplified and transparent tax process that facilitated the Ease of Doing Business. This marks the fourth year in a row where sentiment has improved.

The ‘One Nation, One-Tax’ made tax compliance easier, reduced costs for businesses, and allowed goods to move freely across states.

It brought together a wide range of indirect taxes under one umbrella by replacing levies like excise duty, service tax, VAT and others. This helped remove the cascading effect of taxes and brought consistency in the tax system across the country.

The Deloitte report titled GST@8 described the past year as a blockbuster for GST. It credited the government’s timely reforms, clear guidance to taxpayers, and steady upgrades on the GST portal as key reasons behind this success. These measures not only improved Ease of Doing Business but also strengthened the tax base.

GST is a consumer-friendly reform. It places the end-user at the centre of the tax system. With the removal of multiple taxes and improved compliance, the average tax rates have come down. The number of registered taxpayers has grown from 60 lakh to around 1.51 crore. This has expanded the tax base and allowed the government to lower rates on many essential items.

Goods like cereals, edible oils, sugar, snacks and sweets now carry lower tax rates. A study by the Finance Ministry noted that GST helped households save at least 4 per cent on monthly expenses in total. Consumers now spend less on daily necessities.

GST has transformed the logistics industry. Long queues of trucks at state borders and corruption-prone checkpoints have become a thing of the past. Goods now move faster and more freely across state lines.

Transport time has improved by over 33 per cent, according to several studies. Companies have cut down on fuel costs, and major highways are less congested.

GST has brought major relief to micro, small and medium enterprises. Earlier, thresholds under VAT and other state taxes were very low, making compliance difficult for small businesses.

GST changed this by setting a higher exemption limit. Initially fixed at Rs 20 lakh, the threshold for goods was later raised to Rs 40 lakh, giving breathing space to many small traders and manufacturers.