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Hindustan Times
a day ago
- Business
- Hindustan Times
8 years of GST: Journey of reform, resilience, renewal
Reform is not a one-time event, but a continuous process. This adage best explains the journey of the Goods and Services Tax (GST) in India. On the midnight of July 1, 2017, India witnessed a tectonic shift in its fiscal architecture with the launch of GST. On the midnight of July 1, 2017, India witnessed a tectonic shift in its fiscal architecture with the launch of the Goods and Services Tax (GST) in India. Marketed as 'One Nation, One Tax', GST aimed to subsume a labyrinth of central and state levies into a unified, destination-based tax. Eight years on, the reform has matured from a disruptive overhaul to a stabilising force in India's indirect tax regime. As we reflect on this transformative period, it becomes imperative to examine the early hurdles, the mechanisms that addressed them, the current state of compliance assurance, and the road ahead. The idea of a unified goods and services tax was first mooted in 2000 by the Atal Bihari Vajpayee government. It took 17 years of political negotiation, constitutional amendments, and consensus-building to bring it to fruition. The 101st Constitutional Amendment Act laid the legal foundation, while the GST Council, an embodiment of cooperative federalism, became the nerve centre for rate rationalisation and policy calibration. Complexity in simplicity Despite its promise of simplification, GST's rollout was riddled with challenges. The Goods and Services Tax Network (GSTN), the digital backbone of the regime, struggled to handle the surge in return filings. Frequent downtimes and system crashes frustrated taxpayers, particularly during peak deadlines. The original return-filing structure (GSTR-1, 2, 3) proved too complex and was quickly replaced by the simplified GSTR-1 and GSTR-3B. Small and medium enterprises (SMEs) found it difficult to adapt to digital compliance, invoice matching, and input tax credit (ITC) reconciliation. The presence of five major tax slabs — 0%, 5%, 12%, 18%, and 28% — led to classification disputes and undermined the goal of a simplified tax structure. States were apprehensive about revenue loss and autonomy. The compensation mechanism, funded through a cess on sin and luxury goods, was introduced to allay these concerns. Adaptive governance The GST Council, with a total 55 meetings to date, has demonstrated remarkable agility in responding to stakeholder feedback. Key reforms include: i) The introduction of the quarterly returns with monthly payment (QRMP) scheme for small taxpayers, reducing filing frequency while maintaining revenue flow; ii) E-invoicing mandates for large businesses, enhancing invoice authenticity and curbing fake ITC claims; iii) Launch of GSTR-2B, a static ITC statement, which brought predictability to credit claims; iv) Automated return scrutiny and AI-driven analytics, enabling risk-based audits and reducing human interface; and v) E-way bill system and the upcoming Invoice Management System (IMS) have streamlined logistics and compliance. These interventions reflect a shift from rule-based enforcement to data-driven compliance assurance. Maturing ecosystem As of FY 2024–25, GST collections have consistently crossed ₹ 1.6 lakh crore a month, with May 2025 touching ₹ 2.01 lakh crore — a record high. Return filing rates have improved, and the GSTN infrastructure has stabilised. The integration of GST data with income tax and customs databases has enabled better triangulation and reduced evasion. The compliance ecosystem has matured, with most businesses adapting to digital workflows. The long-awaited GST Appellate Tribunal will be finally operational soon, addressing a critical gap in dispute resolution. Reform to refinement Despite the progress, challenges persist. The multiplicity of slabs continues to create confusion. A merger of the 12% and 18% rates, as recommended by the group of ministers, remains pending. Sectors like textiles and footwear still face refund backlogs due to input-output rate mismatches. Frequent rule changes and notifications, though well-intentioned, often overwhelm taxpayers. Smaller businesses in rural areas still struggle with digital literacy and infrastructure. With the compensation cess set to expire in March 2026, the government must explore alternatives, such as merging cess into base GST rates and raising the present cap of maximum 40% or introducing targeted levies like a health or clean energy cess — to maintain fiscal neutrality. Way forward: GST 2.0 To fulfil its promise, GST must now evolve from a compliance framework to a facilitative ecosystem. Simplifying rate structure to reduce disputes and improve ease of doing business. Enhancing taxpayer services through pre-filled returns, real-time dashboards, and multilingual support. Institutionalising capacity building for tax officers and taxpayers alike, particularly in tier-2 and tier-3 cities. Strengthening dispute resolution through faster appellate processes and mediation mechanisms. Leveraging technology not just for enforcement, but for predictive analytics, fraud prevention, and policy design. Eight years into its journey, GST stands as a testament to India's ability to undertake complex structural reforms through consensus and iteration. It has unified the national market, improved tax buoyancy, and fostered a culture of compliance. Yet, it remains a reform in motion — demanding continuous refinement, stakeholder engagement, and political will. As India aspires to become a $5 trillion economy, a robust, transparent, and taxpayer-friendly GST regime will be indispensable. The next chapter must focus not just on plugging gaps, but on unlocking potential. Baljit Singh Khara (HT Photo) The writer is a former Indian Revenue Service officer. Views expressed are personal.
Hindustan Times
2 days ago
- Business
- Hindustan Times
Aadhaar, train booking, ITR: New rules in effect from July 1
Starting today, several new rules will come into effect that could affect your financial, banking and other everyday transactions. ITR, GSTN, credit cards, Tatkal bookings, PAN to see key changes, operational today.(Reuters File) Filing income tax returns, HDFC, SBI, and ICICI banks' credit card charges, Tatkal train ticket bookings, making Aadhaar card mandatory for new PAN applicants, are some of the changes that will be come into effect from Jul 1, 2025. Here is the complete list: 1. Extension of ITR filing deadline For this assessment year (2025-26), there has been an extension for the deadline for filing non-audit cases, i.e for salaried individuals filing ITR-1 and ITR-4 to Sept 15, 2025. Self-assessment tax payment deadline stands at 31 July 2025. Put across by Central Board of Direct Taxes (CBDT), this replaced the earlier window which allowed submissions only till July 31, in order to accommodate structural changes and utility rollout delays. 2. Changes in HDFC, SBI, and ICICI banks' credit cards State Bank of India will discontinue the air accident insurance, that it offered when using SBI Elite, Miles Elite, and Miles Prime, and other select premium cards to purchase air tickets. HDFC and ICICI Bank customers will also see revised charges on select transactions. For HDFC, a one per cent transaction fee (capped at ₹ 4,999 per transaction) will be applied if the card is used to pay rent or spend over ₹ 10,000 on online skill-based games. Using a HDFC card for monthly utility payments that are over ₹ 50,000 or loading over ₹ 10,000 into a digital wallet in a single transaction, there will be a similar transaction fee. The exception stands only for insurance transactions. ICICI Bank customers will see revisions to service charges, including for ATM transactions. The first five transactions at ICICI Bank ATMs along with non-financial transactions will continue to be free. After the free five transactions, users will be charged ₹ 23 per transaction. If non-bank ATMs are used, the number of free transactions is three for metro cities and five in smaller ones. Above this, the bank will require a ₹ 23 and ₹ 8.5 per transaction, respectively. For transactions on international ATMs, ICICI bank will charge ₹ 125 per withdrawal, ₹ 25 for non-financial transactions, and a 3.5 percent currency conversion fee. For Axis Bank users, out-of-network ATM withdrawals will now cost ₹ 23 per transaction. 3. Tatkal train bookings Indian railways is enhancing the ticket booking capacity by upgrading the Passenger Reservation System (PRS), allowing over 1.5 lakh ticket bookings per minute. The ticketing and reservation process is also being revamped, by advancing the preparation of the chart eight hours before the train's departure. This will reduce uncertainties for passengers with waitlist tickets. The passengers will get the first update on waitlist status well in advance. 4. Mandatory Aadhaar card for new PAN applicants The Central Board of Direct Taxes has made Aadhaar verification mandatory for all new PAN card applications. It also mandated Aadhaar number linking to PAN for existing users by December 31. Any valid government-issued ID, such as a driving license, and a birth certificate is required for those applying for a new PAN card. 5. RBI extends call money market hours The Reserve Bank of India has extended its interbank call money market trading window from its earlier timing 9 am-5 pm to 9 am-7pm, effective today, adding two hours each day for banks to borrow and lend funds. 6. GSTR-3B returns cannot be edited anymore For the GST filing citizens, Goods and Services Tax Network (GSTN) will lock its GSTR-3B form now. Returns will be auto populated using the data on GSTR-1/1A form and cannot be edited once submitted. 7. Changes in online transaction fees Charges for online transfers, i.e., via Immediate Payment Service (IMPS), have been revised from ₹ 2.5 to ₹ 15 depending on the amount transferred. Users will also get three free cash transactions per month at the cash recycler machines, after which they are to pay ₹ 150 per transaction.
Hans India
16-06-2025
- Business
- Hans India
Centre kicks off ‘GST Pakhwada' to mark 8 years of tax reforms
The Central Board of Indirect Taxes and Customs (CBIC) kicked off a nationwide 'GST Pakhwada' on Monday which will continue till June 30, as part of the upcoming GST Day celebrations on July 1. The two-week campaign aims to spread awareness about the Goods and Services Tax (GST) and assist taxpayers in resolving their queries. Helpdesks have been set up at all Central GST (CGST) Commissionerates across the country to offer guidance and support. The initiative also commemorates eight years of GST implementation in India, a landmark reform that unified the country's indirect tax system in 2017. This outreach comes at a time when the Goods and Services Tax Network (GSTN) has announced significant changes to the return filing process that will take effect from the July 2025 tax period. From that point onward, the monthly GST payment form GSTR-3B will become non-editable. This means businesses will no longer be able to manually change any details after filing. Instead, the form will be auto-filled based on sales data from other forms like GSTR-1, and corrections will have to be made in advance through form GSTR-1A, according to CBIC. GSTN said this step is being taken to improve accuracy between GST returns and prevent revenue leakages. Additionally, a strict time limit is being introduced for filing returns. Starting July 2025, taxpayers will not be allowed to file any GST returns more than three years after the due date. This rule will apply to all types of returns, including GSTR-1, GSTR-3B, GSTR-9, GSTR-4, and others. This change was part of the Finance Act, 2023 and will now be enforced on the GST portal. Taxpayers have been advised to review their records and submit any pending returns before the new rules come into force to avoid being permanently locked out.
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Business Standard
10-06-2025
- Business
- Business Standard
E-way bills grow nearly 19% to 122.65 million in May, shows data
The year-on-year (Y-o-Y) growth in e-way bills — electronic permits required for transporting goods across and within states — surged by nearly 19 per cent in May, compared with a 23.29 per cent growth registered in April, according to data from the Goods and Services Tax Network (GSTN). This is the second-highest growth after a record 124.5 million in March this year. Sequentially, the number of e-way bills increased by 2.83 per cent in May, reaching 122.65 million, after a dip of 4.2 per cent in April to 119.26 million. E-way bills are required to move goods worth more than ₹50,000 and are often used as an early indicator of demand and supply in the economy. These trends typically manifest in larger economic indicators after some time. Intra-state e-way bills stood at 80.17 million in May, while inter-state e-way bills totalled 42.48 million during the month. According to GSTN data, there are 15.2 million registered GST payers, with 6.19 billion e-way bills generated cumulatively so far. The noticeable increase in the generation of e-way bills signals a significant improvement in compliance, indicating a stronger potential to reduce tax leakages, according to Abhishek Rastogi, Founder of Rastogi Chambers. "Businesses have become increasingly cautious in issuing accurate e-way bills, especially in response to numerous instances where flying squads have intercepted vehicles and taken stringent action against non-compliance. Such proactive enforcement has prompted businesses to adhere more strictly to GST norms," Rastogi said. He further noted that these compliance-oriented mechanisms are instrumental in strengthening the overall GST revenue collection framework. However, Rastogi also highlighted that there have been cases, some even reaching the courts, where perishable goods were subjected to manifestly arbitrary and unlawful actions. 'The GST Council must ensure that enforcement efforts are balanced and fair,' Rastogi added. 'It is essential that genuine businesses are protected from undue hardship, and all measures must be taken to prevent actions that could be detrimental to legitimate trade.' The Reserve Bank of India (RBI) cut the repo rate by 50 basis points on Friday and stated that private consumption, which drives overall demand, is performing well, helped by a slow rise in non-essential spending. It noted that rural demand is steady, urban demand is improving, and investment activity is picking up. The central bank expects the economy to grow by 6.5 per cent in FY26, with balanced risks.
Mint
10-06-2025
- Business
- Mint
E-way bills shoot up to 122.7 million in May, the second-highest on record
New Delhi: Electronic permits raised by businesses and traders for shipping goods within and across states shot up to 122.7 million in May, second only to the record 124.5 million raised in March, suggesting brisk economic activity in the second month of the current fiscal year. Data from GSTN, the company that processes GST returns, showed that e-way bill generation, which saw a small drop in April, rose nearly 3% month-on-month and 19% year-on-year in May. The data also suggested that despite the uncertainty around exports in the wake of a 10% universal baseline import tariff imposed by the US – India's largest export market – factory output is holding up. The 10% tariff came into effect on 5 April, but the higher country-specific tariff of 26% on India has been suspended during the ongoing trade talks. S&P Global said on 2 June that the HSBC India manufacturing purchasing managers index (PMI) stood at 57.6 in May, indicating an improvement in business conditions across India's manufacturing industry, although it was the weakest improvement in operating conditions since February. The PMI, based on a survey of 400 panellists from different manufacturing industries, was at 58.2 in April. A reading above 50 indicates expansion from the previous month and below that, a contraction. The Federation of Automobile Dealers' Association had last week reported a 'modest 5%' annual increase in automobile sales in May, led by two- and three-wheelers and tractors, while passenger vehicles, construction equipment and commercial vehicles witnessed a contraction. The association said India's economic foundations remained robust, and that renewed rural liquidity and stronger farm incomes should bolster semi-urban and hinterland demand for two-wheelers and tractors, though global supply-chain headwinds ranging from rare-earth constraints in electric vehicle components to ongoing geopolitical tensions may keep urban consumer sentiment in check. The surge in e-way bill generation in May, the second-highest on record, reflected more than just a recovery from the April dip, said Rajat Mohan, senior partner at AMRG & Associates. He said it signalled strong underlying economic activity supported by seasonal, policy and compliance factors. 'A likely driver was anticipation around a GST Council meeting, prompting businesses to advance dispatches. Additionally, with a year having passed since the 2024 general elections, infrastructure and public sector projects likely resumed at scale, boosting goods movement. Production-linked incentive scheme expansions and pre-Kharif agricultural demand may have further contributed to intra- and inter-state logistics activity. Meanwhile, increased compliance—possibly due to anti-evasion drives—also led to higher e-way bill filings,' he added. Overall, May reflected a robust and formalising supply-chain ecosystem, supported by both economic recovery and administrative vigilance, he said. While announcing a 50 basis points repo rate cut, the RBI said on Friday that private consumption, the mainstay of aggregate demand, remained healthy, with a gradual rise in discretionary spending. Rural demand remained steady, while urban demand was improving and investment activity was seeing a revival, the central bank said while forecasting a 6.5% economic growth for FY26, with risks evenly balanced.
