India’s GST Reform Journey

 

1. Goods and Services Tax (GST) was launched on 1 July 2017, replacing multiple indirect taxes with a unified tax system based on the principle of “One Nation, One Tax.”

2. GST subsumed 17 different taxes and 13 cesses into a common indirect tax framework.

3. GST is a destination-based consumption tax, under which tax revenue accrues to the State where goods or services are finally consumed.

4. GST is levied on the supply of goods and services rather than separately on manufacture, sale, or provision of services.

5. Goods and Services Tax Network (GSTN) is a 50:50 Centre–State Government-owned company that provides the digital infrastructure for the GST system.

6. GST follows a dual tax structure consisting of Central Goods and Services Tax (CGST), State Goods and Services Tax (SGST), and Integrated Goods and Services Tax (IGST) for inter-State supplies.

7. The 56th GST Council meeting approved the Next-Generation GST Reforms (GST 2.0), which came into effect on 22 September 2025.

8. GST 2.0 streamlined the tax structure by primarily adopting two tax slabs—5% and 18%.

9. GST 2.0 introduced a 40% GST rate on luxury and sin goods such as lottery and online gaming, tobacco, aerated drinks, high-end cars, yachts, and private aircraft.

10. From April 2019, the GST registration threshold for suppliers of goods was increased from ₹20 lakh to ₹40 lakh, while the Composition Scheme limit was raised from ₹75 lakh to ₹1.5 crore (except certain special category States).

11. The Quarterly Return Filing and Monthly Payment (QRMP) Scheme, introduced in 2020, allows taxpayers with annual turnover up to ₹5 crore to file quarterly GST returns.

12. From October 2023, small taxpayers making intra-State supplies through e-commerce operators were exempted from mandatory GST registration.

13. The number of GST taxpayers increased from 66.5 lakh in 2017 to 1.65 crore as of May 2026, indicating greater formalisation of the economy.

14. Gross GST collections increased from around ₹7.4 lakh crore in 2017–18 to about ₹22.27 lakh crore in 2025–26, while collections during April–May 2026 reached around ₹4.37 lakh crore.

15. Artificial Intelligence (AI), Machine Learning (ML), and data analytics are being used under GST to detect tax evasion, identify high-risk taxpayers, and improve compliance through technology-driven tax administration.

Must Know Terms :

 

1.GST: Goods and Services Tax (GST) was launched on 1 July 2017 as India’s unified indirect tax system. It subsumed 17 taxes and 13 cesses under the principle of “One Nation, One Tax.”

 

2. GST Council: The GST Council is a constitutional body responsible for making recommendations on GST rates, exemptions, rules, and policy changes. It promotes cooperative federalism by enabling joint decision-making between the Centre and States.

 

3. GSTN: Goods and Services Tax Network (GSTN) is a 50:50 Centre–State Government-owned company that provides the digital backbone for GST registration, return filing, tax payment, and compliance.

 

4. GST 2.0: Introduced through the 56th GST Council meeting, GST 2.0 came into effect on 22 September 2025. It simplified the tax structure with mainly 5% and 18% tax slabs and eased compliance for businesses.

 

5. QRMP: Quarterly Return Filing and Monthly Payment (QRMP) Scheme, launched in 2020, allows taxpayers with annual turnover up to ₹5 crore to file quarterly GST returns while paying taxes every month.

 

6. Composition Scheme: The Composition Scheme is a simplified GST scheme for small taxpayers, allowing them to pay tax at a fixed rate with reduced compliance. From April 2019, the turnover limit was increased from ₹75 lakh to ₹1.5 crore (except certain special category States).

 

 

MCQ :

 

1. With reference to the Goods and Services Tax (GST), consider the following statements:

1. GST was launched on 1 July 2017.
2. It replaced multiple indirect taxes with a unified tax system.
3. It is based on the principle of “One Nation, One Tax.”

Which of the statements given above are correct?

A. 1 and 2 only
B. 2 and 3 only
C. 1 and 3 only
D. 1, 2 and 3

2. Which of the following were subsumed under the Goods and Services Tax (GST)?

A. 17 taxes and 13 cesses
B. 13 taxes and 17 cesses
C. 15 taxes and 12 cesses
D. 18 taxes and 10 cesses

3. GST is best described as:

A. Origin-based production tax
B. Destination-based consumption tax
C. Wealth tax
D. Direct income tax

4. Under the GST framework, tax is primarily levied on:

A. Manufacture of goods
B. Sale of goods
C. Supply of goods and services
D. Import of goods only

5. With reference to the Goods and Services Tax Network (GSTN), consider the following statements:

1. It is a 50:50 Centre–State Government-owned company.
2. It provides the digital infrastructure for GST.
3. It is responsible for framing GST tax rates.

Which of the statements given above is/are correct?

A. 1 and 2 only
B. 2 only
C. 1 and 3 only
D. 1, 2 and 3

6. Which one of the following correctly represents India’s dual GST structure?

A. CGST and IGST only
B. SGST and IGST only
C. CGST, SGST and IGST
D. CGST and UTGST only

7. With reference to GST 2.0, consider the following statements:

1. It was approved during the 56th GST Council meeting.
2. It came into effect on 22 September 2025.
3. It primarily adopted two GST slabs of 5% and 18%.

Which of the statements given above are correct?

A. 1 and 2 only
B. 2 and 3 only
C. 1 and 3 only
D. 1, 2 and 3

8. Under GST 2.0, a GST rate of 40% has been imposed on:

1. Tobacco
2. Lottery and online gaming
3. High-end cars
4. Essential medicines

Select the correct answer using the code below.

A. 1 and 2 only
B. 1, 2 and 3 only
C. 2, 3 and 4 only
D. 1, 2, 3 and 4

9. From April 2019, the GST registration threshold for suppliers of goods was increased to:

A. ₹20 lakh
B. ₹30 lakh
C. ₹40 lakh
D. ₹50 lakh

10. The Quarterly Return Filing and Monthly Payment (QRMP) Scheme applies to taxpayers having an annual turnover of up to:

A. ₹2 crore
B. ₹3 crore
C. ₹5 crore
D. ₹10 crore

11. Which of the following statements regarding GST reforms is correct?

A. E-commerce sellers must always obtain GST registration irrespective of turnover.
B. Small taxpayers making intra-State supplies through e-commerce operators were exempted from mandatory GST registration from October 2023.
C. GST registration became compulsory for all small traders from October 2023.
D. QRMP Scheme was abolished in 2023.

12. The number of GST taxpayers increased from 66.5 lakh in 2017 to approximately ______ as of May 2026.

A. 1.05 crore
B. 1.25 crore
C. 1.45 crore
D. 1.65 crore

13. Gross GST collections increased to about ______ during 2025–26.

A. ₹18.27 lakh crore
B. ₹20.12 lakh crore
C. ₹22.27 lakh crore
D. ₹24.37 lakh crore

14. Which of the following technologies are being used under GST administration?

1. Artificial Intelligence (AI)
2. Machine Learning (ML)
3. Data Analytics

Select the correct answer using the code below.

A. 1 and 2 only
B. 2 and 3 only
C. 1 and 3 only
D. 1, 2 and 3

15. With reference to the Composition Scheme under GST, consider the following statements:

1. It is meant for small taxpayers.
2. It allows payment of GST at a fixed rate with simplified compliance.
3. From April 2019, its turnover limit was increased from ₹75 lakh to ₹1.5 crore (except certain special category States).

Which of the statements given above are correct?

A. 1 and 2 only
B. 2 and 3 only
C. 1 and 3 only
D. 1, 2 and 3