As the Goods and Services Tax (GST) regime enters its ninth year, revenue collections remain robust, but key structural challenges persist. Experts emphasise that the next phase—dubbed GST 2.0—must focus on expanding the tax base to include petroleum and electricity, rationalising the rate structure and dispute resolution. These reforms are seen as crucial to making GST more efficient, business-friendly, and a stronger driver of India’s economic growth.Bipin Sapra, Partner and Indirect Tax Policy Leader at EY India, notes that while GST has been a landmark reform simplifying compliance and unifying the market, it now needs to evolve from merely stabilising revenues to becoming a strategic enabler of investment and business growth. “The next phase must prioritize expanding the tax base, rationalizing rates, easing credit restrictions, and streamlining audits and investigations,” he says.One of the pressing issues is the scheduled phase-out of the GST compensation cess by March 2026. This cess currently supports states in compensating for revenue losses from GST implementation. Its withdrawal has reignited debates about state revenue security and the future use of the existing cess surplus, which exceeds Rs 40,000 crore. Discussions are also underway about possible hikes in cess rates on demerit goods such as tobacco and luxury automobiles to bridge funding gaps.Meanwhile, the long-awaited GST Appellate Tribunal, designed to resolve the growing backlog of tax disputes, is yet to become operational. The government is finalising its structure and regional benches, with plans to roll it out by the end of FY26, which experts say will be a critical step in easing the litigation burden.Karthik Mani, Partner – Indirect Tax at BDO India, highlights that while GST transformed tax administration and boosted technological adoption, procedural complexities and lingering litigations must be addressed to sustain confidence. “Simplifying the law and resolving high-value disputes are essential to support the government’s vision of a developed India by 2047,” he says.India’s GST Collections Cross Rs 2 Lakh Crore In May, Up 16.4% YoYEfforts are also intensifying to standardise compliance and audit processes across the Centre and states. The move includes greater use of data analytics and artificial intelligence to improve return scrutiny and audit triggers, alongside continued emphasis on faceless, technology-driven compliance systems.Expanding the GST net remains a key priority. Simplifying registration processes—particularly for small businesses and the informal sector—and wider adoption of e-invoicing and invoice matching are expected to improve transparency, plug revenue leakages, and bring more taxpayers into the formal system.GST At 8: A Snapshot Of A Landmark Reform The GST was rolled out on July 1, 2017, marking the biggest tax reform in independent India’s history. It replaced a complex system of multiple indirect taxes levied separately by the Centre and states—such as excise duty, VAT, and service tax—with a single, unified tax regime.In FY24–25, Goods and Services Tax (GST) collections reached a record Rs 22.08 lakh crore, marking a 9.4% year-on-year increase. The monthly average stood at Rs 1.84 lakh crore—nearly double the Rs 95,000 crore average recorded in FY20–21, when total collections were Rs 11.37 lakh crore. This steady growth reflects rising economic activity and stronger tax compliance.As of April 2025, active GST registrations crossed 1.51 crore, indicating deeper formalisation across sectors. The current rate structure includes four main slabs—5%, 12%, 18%, and 28%—which apply to most goods and services, alongside special rates for precious metals and stones. Additionally, a GST Compensation Cess remains in place for select items such as tobacco, aerated beverages, and luxury vehicles, supporting states in managing revenue transitions.Eight years on, GST has reshaped India’s indirect tax landscape through cooperative federalism, digital infrastructure, and streamlined compliance. With the next phase of reforms—GST 2.0—on the anvil, India’s tax system is gearing up for a strategic upgrade aimed at boosting ease of doing business, widening the tax base, and driving sustainable economic growth.Eight Years Of GST: Industry Gives A Thumbs Up, Deloitte Survey Finds. Read more on Economy & Finance by NDTV Profit.