India’s ambition to become a Viksit Bharat requires an economy in which enterprises of every size can grow, regardless of where they begin. Over the past twelve years, the government has worked to create the conditions necessary for such growth. The introduction of the Goods and Services Tax (GST) in 2017 established a common national framework for indirect taxation. The next generation of GST reforms builds on nine years of implementation and the experience of taxpayers and states.
GST’s growing maturity provides a stronger foundation for the next stage of reform.
Under Prime Minister Narendra Modi’s vision, the next phase of GST reform was conceived with two interconnected objectives: reducing and rationalizing tax rates and making compliance easier. The rate changes took effect on September 22, 2025. The next phase of process reforms is expected to come before the GST Council. Together, these measures aim to provide relief to households, greater certainty to businesses and a tax system in which taxpayers can fulfil their obligations without avoidable difficulties.
The states have been important partners throughout the GST journey. They have brought their priorities and experience to the GST Council, helped shape decisions and undertaken their implementation. Sitharaman has acknowledged their role, noting that GST’s progress rests on the willingness of governments to pursue a shared national purpose while respecting their respective responsibilities.
The results so far provide grounds for confidence. Between October 2025 and July 2026, the value of reported taxable supplies grew by 25.8% compared with the corresponding period a year earlier. The lighter rate structure has been accompanied by a substantial expansion in reported economic activity, providing an encouraging foundation for a reform intended to support both enterprise and public finances.
The resilience of the system is also reflected in recent revenue figures. Gross GST collections reached ₹12.46 lakh crore during April–September 2026, representing an 11.6% increase over the corresponding period of the previous year. Every month from June through September recorded double-digit annual growth, with combined collections for those four months accelerating by nearly 15%.
Net GST collections, after refunds, also increased by 10.4% during the first half of the financial year. The figures suggest that taxpayer relief has coexisted with growth in the resources available for development.
The breadth of the expansion is as significant as its scale. Reported taxable supplies increased across all 11 sector groups and all major states. In an economy as diverse as India’s, such widespread growth is significant because it creates opportunities for more businesses to participate in expanding markets and allows more communities to benefit from the demand, investment and employment generated by economic activity.
Reported business-to-consumer (B2C) sales also increased by 26.7% in the post-reform comparison. When tax relief is reflected in prices, households have greater room to meet other needs or save. Consumer relief and enterprise growth are closely connected because household purchasing power supports demand for the goods and services produced by businesses. The resulting benefits can extend from households to retailers, suppliers and manufacturers.
For small and medium-sized enterprises, a national market becomes particularly valuable when it provides a practical route to customers beyond their immediate surroundings. Businesses in Tier-2 and Tier-3 cities and towns can use these opportunities to build relationships with customers while continuing to invest and create employment locally.
At the same time, enterprises expanding into smaller cities can generate opportunities for local suppliers and distributors. The common GST framework supports these economic connections, while simpler administration can make them easier to maintain.
Participation in the GST framework has also expanded substantially. GST registrations across Central and state jurisdictions stood at approximately 17.1 million at the end of August, an increase of nearly 15% from a year earlier.
For the April–July 2026 tax periods, GSTR-3B returns filed by their due dates were 12.6% higher than during the corresponding periods of the previous year. These improvements place a corresponding responsibility on the tax administration to ensure that regular compliance is supported by reliable services, clear guidance and timely resolution of taxpayer difficulties.
The functioning of input tax credit remains another important component of the GST experience. Post-reform figures indicate that the share of tax liability discharged through credits increased, while accumulated credit declined relative to taxable supplies. This is encouraging for businesses that depend on the effective use of eligible tax credits.
For smaller businesses in particular, working capital can determine how easily a firm can purchase inputs, fulfil an order and take on its next opportunity. A predictable and efficient credit mechanism can therefore have a direct impact on business operations and expansion.
Refunds are equally important to the functioning of the tax system. Approximately ₹1.80 lakh crore was refunded between April and September 2026. Returning eligible amounts to businesses is an essential part of a well-functioning tax administration.
Greater predictability in the refund process can help enterprises plan purchases and production with greater confidence. The taxpayer’s experience in receiving an eligible refund is therefore an important measure of administrative performance.
The states have also recorded a stronger revenue position. Aggregate SGST receipts, including their share of IGST settlements, grew by approximately 16% during April–September 2026. These resources support investment in infrastructure and public services, helping improve the conditions in which households and businesses pursue their economic aspirations.
The various gains can consequently reinforce one another: household relief supports demand, stronger enterprises contribute to economic activity, and public revenues help sustain development.
At the same time, the experience of GST reform highlights the work that remains. As the system expands, policymakers must remain attentive to the compliance costs imposed on smaller participants. Their time and financial resources are limited, making each improvement in filing, tax credit and refunds particularly important.
The proposals before the GST Council on October 7 have been developed through sustained engagement with the states. They address areas including registration, returns, refunds, disputes and the improved flow of input tax credit, with the objective of reducing the time and cost associated with compliance.
Taxpayer experience, therefore, is expected to remain an important guide for implementation.
Sitharaman has emphasized that GST’s growing maturity provides a stronger foundation for the next stage of reform. The same commitment to clarity, certainty and respect for taxpayers also informs the government’s work on direct taxation.
A dependable tax system enables businesses to plan beyond their immediate obligations and invest in opportunities that may take time to mature. Providing enterprises with that confidence, wherever they operate, can contribute to the broader economic strength required to build the Viksit Bharat envisioned by Prime Minister Narendra Modi.
Nirmala Sitharaman is the Union Minister of Finance and Corporate Affairs.
