Next-Gen GST and India’s next phase of growth | Expert Views

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 twelve years, our government has worked to create those conditions. The introduction of the goods and services tax (GST) 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. 

The 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. GST’s progress rests on this willingness to pursue a shared national purpose while respecting each government’s responsibilities. 

The results provide grounds for confidence. Between October 2025 and July 2026, the value of reported taxable supplies grew by 25.8 per cent 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. 

That resilience is visible in the latest revenue figures. Gross GST collections reached ₹12.46 trillion during April-September 2026, up 11.6 per cent over the corresponding period last year. Every month from June through September recorded double-digit annual growth; together, collections for these four months accelerated by nearly 15 per cent. Net collections, after refunds, also grew by 10.4 per cent 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. In an economy as diverse as India’s, this spread is significant. 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) also rose by 26.7 per cent 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-II and Tier-III 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 stood at approximately 17.1 million at the end of August, up nearly 15 per cent from a year ago. For the April–July 2026 tax periods, GSTR-3B returns filed by their due dates were 12.6 per cent higher than for the same periods last year. 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. Approximately ₹1.80 trillion 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 taxpayer’s experience of receiving an eligible refund is an important measure of administrative performance. 

The states also have a stronger revenue position. Their aggregate SGST (state GST) receipts, including their share of IGST (integrated GST) settlements, grew by about 16 per cent during April-September this year. These resources support investment in infrastructure and public services, which improve the conditions in which families and enterprises pursue their aspirations. The gains can therefore reinforce one another: Household relief supports demand, enterprise strengthens economic activity, and public revenues help sustain development.  

The experience also points to the work ahead. A growing system must remain attentive to the costs it imposes on smaller participants. Their time and resources are limited. Each improvement in filing, credit or refunds should allow more of those resources to be devoted to running and expanding a business. 

The proposals before the Council on October 7 have been developed through sustained work with the states. They address registration, returns, refunds, disputes and improved flow of input tax credit, with the aim of reducing the time and cost of compliance. Taxpayer experience must continue to guide implementation. 

The GST’s growing maturity gives us a stronger foundation for the next stage of reform. The same commitment to clarity, certainty and respect for the taxpayer guides our work on direct taxes. A dependable tax system enables enterprises to plan beyond their immediate obligations and invest in opportunities that take time to mature. Giving them that confidence, wherever they operate, helps build the economic strength of a Viksit Bharat as envisioned by Prime Minister Narendra Modi.

The writer is the Union Minister of Finance and Corporate Affairs