Next-gen GST: Taking India's reform journey forward

India's ambition to become a Viksit Bharat requires an economy in which enterprises of every size can grow, wherever they begin. Over the past 12 years, our government has worked to create those conditions. GST's introduction in 2017 established a common national framework for indirect taxation. Next-gen GST carries that effort forward, drawing on nine years of implementation and the experience of taxpayers and states.

Under Prime Minister Narendra Modi's vision, next-gen GST was conceived with two connected purposes: to reduce and rationalise rates, and to make compliance easier. The rate changes took effect on September 22, 2025. The next phase of process reforms will come before the GST Council shortly. Together, these efforts seek to give households relief, businesses greater certainty and taxpayers a system in which they can fulfil their obligations without avoidable difficulty.

Also Read: GST 2.0 may scrap arrest powers, raise prosecution bar


States have been partners throughout. They brought their priorities and experience to the council, helped shape the decisions and undertook their implementation. I thank them for that commitment.

The results provide grounds for confidence. Between October 2025 and July 2026, the value of reported taxable supplies grew 25.8% over the corresponding period a year earlier. A lighter rate structure has been accompanied by a substantial expansion in reported economic activity. This is an encouraging foundation for a reform intended to support both enterprise and public finances.

Also Read: India within reach of 8% growth, says Ex-RBI guv

That resilience is visible in the latest revenue figures. Gross GST collections reached ₹12.46 lakh crore during April-September 2026, up 11.6% from a year earlier. Every month from June through September recorded double-digit annual growth; together, collections for these four months accelerated by nearly 15%. Net collections, after refunds, grew 10.4% over the half-year. Taxpayer relief has coexisted with growth in the resources available for development.

The breadth of the expansion matters as much as its scale. Reported taxable supplies grew across all 11 sector groups and all major states. Growth across sectors and regions creates opportunities for more businesses to participate in expanding markets, and for more communities to benefit from the demand, investment and employment that follow.

Reported sales to consumers (B2C) rose 26.7% in the post-reform comparison. When tax relief is reflected in prices, families have more room to meet other needs or save. Consumer relief and enterprise growth are closely connected: the purchasing power of households sustains demand for the goods and services that businesses provide. The benefits can extend from the household to the retailer, the supplier and the producer.

For small and medium enterprises, a national market is valuable when it opens a practical route to customers beyond their immediate surroundings. Businesses in tier-2 and tier-3 towns should be able to build those relationships while continuing to invest and employ people locally. Enterprises expanding into these towns, in turn, can create opportunities for local suppliers and distributors. GST's common framework supports these connections; simpler administration must make them easier to sustain.

Participation in that framework is substantial. GST registrations across central and state jurisdictions were about 17.1 million at the end of August, up 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. These improvements place a corresponding responsibility on the administration: regular compliance must be supported by reliable service, clear guidance and timely resolution of difficulties.

The functioning of input tax credit is another important part of this experience. The post-reform figures show that the share of tax liability discharged through credits rose, while accumulated credit declined relative to taxable supplies.

This is encouraging for businesses that depend on the effective use of eligible credit. For a smaller firm, working capital determines how readily it can purchase inputs, fulfil an order and take on the next one. Refunds are equally relevant. About ₹1.80 lakh crore was refunded during April-September. Returning amounts due to businesses is part of a well-functioning tax system. Greater predictability in this process would help enterprises plan purchases and production with more confidence.

(The writer is the union minister of finance and corporate affairs.)