GST has reshaped India's economic landscape, says PM Modi

New Delhi, July 1 (IANS) Prime Minister Narendra Modi on Tuesday said that eight years have passed since GST was introduced, and it 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", PM Modi stated.

"GST has also served as a powerful engine for economic growth, while fostering true cooperative federalism by making states equal partners in this journey to integrate India’s market," the Prime Minister said in a statement on X.

PM Modi had called GST “a path-breaking legislation for New India” at the launch on July 1, 2017. Eight years on, the numbers speak for themselves with GST collections soaring to a record Rs 22.08 lakh crore in 2024-25, marking a year-on-year growth of 9.4 per cent. The number of taxpayers has more than doubled from 60 lakh to over 1.51 crore under the GST regime.

The average monthly collection stood at Rs 1.84 lakh crore in 2024-25, a blockbuster year. In 2020–21, the total collection was Rs 11.37 lakh crore, with a monthly average of Rs 95,000 crore. The following year, it rose to Rs 14.83 lakh crore, and then to Rs 18.08 lakh crore in 2022–23. In 2023–24, GST collections reached Rs 20.18 lakh crore, showing consistent growth in compliance and economic activity.

The One-Nation One-Tax made tax compliance easier, reduced costs for businesses, and allowed goods to move freely across states. It brought together a wide range of indirect taxes under one umbrella by replacing levies like excise duty, service tax, VAT and others. This helped remove the cascading effect of taxes and brought consistency in the tax system across the country.

According to a Deloitte survey, 85 per cent of taxpayers have reported "a positive experience with GST" and view it as a more simplified and transparent tax process that facilitated the ease of doing business. This marks the fourth year in a row where sentiment has improved.

GST is seen as a consumer-friendly reform that has resulted in the removal of multiple taxes and improved compliance, and the average tax rates have come down. Goods like cereals, edible oils, sugar, snacks and sweets now carry lower tax rates. A study by the Finance Ministry noted that GST helped households save at least four per cent on monthly expenses in total. Consumers now spend less on daily necessities.

GST has also transformed the logistics industry. Long queues of trucks at state borders and corruption-prone checkpoints have become a thing of the past. Goods now move faster and more freely across state lines.

Transport time has improved by over 33 per cent, according to several studies. Companies have cut down on fuel costs, and major highways are less congested.

--IANS

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