India’s Goods and Services Tax (GST) regime is entering its second decade with the government shifting its focus from tax rate rationalisation to technology-driven compliance, faster refunds and greater transparency. As the indirect tax system completes 10 years, authorities are increasingly relying on artificial intelligence, data analytics and digital verification to strengthen tax administration while reducing compliance costs for businesses, particularly micro, small and medium enterprises (MSMEs).
Government Focus Shifts to AI Driven Compliance
The report says the government is now prioritising AI-based compliance systems, quicker refund processing and improved data verification instead of concentrating solely on revenue collection. The objective is to simplify tax administration, curb tax evasion and lower compliance costs for MSMEs while making GST processes more efficient.
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The move is expected to strengthen coordination between GST, income tax and customs databases, allowing authorities to identify tax irregularities more effectively through data analytics.
GST Journey Marks a Decade of Expansion
Introduced on July 1, 2017, GST replaced 17 indirect taxes and 13 cesses with a unified indirect tax framework. The reform was introduced to create a “One Nation, One Tax” system and reduce the cascading effect of multiple taxes.
According to the report, the number of registered taxpayers has increased from about 66.5 lakh at the time of GST’s rollout to nearly 1.6 crore by 2026, reflecting wider adoption of the tax regime.
The GST rate structure has also evolved over the years. While the original framework included multiple tax slabs, revisions have gradually shifted many essential goods to the 18 per cent bracket, with the 40 per cent rate continuing to apply only to luxury and demerit goods.
Collections Rise as Tax Administration Evolves
GST collections have grown significantly over the past decade. Average monthly GST revenue, which stood at around ₹89,700 crore during 2017-18, has increased to approximately ₹1.85 lakh crore per month in 2025-26. Total GST collections for 2025-26 rose by 8.3 per cent to ₹22.27 lakh crore, compared with ₹22.08 lakh crore in 2024-25.
The report also notes that petroleum products remain outside the GST framework as states have not reached a consensus on bringing them under the tax regime.
Looking ahead, the government plans to strengthen digital compliance by integrating GST, income tax and customs data, enabling more effective identification of tax evasion while making compliance increasingly technology-driven and transparent.
