New Delhi: Prime Minister Shri Narendra Modi today highlighted the transformative impact of the Goods and Services Tax (GST) as it completes eight years since its introduction. Describing it as a “landmark reform,” the Prime Minister emphasized its role in significantly reshaping India’s economic landscape, particularly benefitting small and medium enterprises (SMEs) by reducing compliance burden and improving the ease of doing business.
In a post on X, Shri Modi stated, “Eight years since it was introduced, GST stands out as a landmark reform that has reshaped India’s economic landscape. By reducing the compliance burden, it has greatly improved the Ease of Doing Business, particularly for small and medium enterprises.”
The Prime Minister further lauded GST for serving as a “powerful engine for economic growth” and fostering “true cooperative federalism by making states equal partners in this journey to integrate India’s market.”
Implemented on July 1, 2017, GST replaced a multitude of central and state indirect taxes, creating a unified national market. This simplification has led to increased tax compliance and a substantial rise in revenue collections. In FY 2024-25, gross GST collections reached a record ₹22.08 lakh crore, marking a significant year-on-year growth. The digital backbone of GST, with features like e-invoicing and real-time credit matching, has also contributed to greater transparency and efficiency.
For SMEs, GST has brought about considerable relief through higher exemption thresholds, simplified procedures, and schemes like the Composition Scheme, which offers lower tax rates and reduced paperwork. The seamless flow of Input Tax Credit (ITC) has also helped reduce the overall tax burden for businesses. Furthermore, the removal of interstate checkposts has significantly improved logistics efficiency, reducing transport times and costs.
The success of GST is also attributed to the collaborative efforts under cooperative federalism, with the GST Council, comprising Union and state finance ministers, working by consensus to set rates and policies. This collaborative approach has ensured balanced revenue sharing and ongoing refinement of the tax system.