- Why in news
- On 30 June 2026, ahead of GST Day (1 July), the PIB published a note on nine years of GST. It reports taxpayer growth to 1.65 crore and collections of about ₹22.27 lakh crore in 2025-26.
- What it is
- The Goods and Services Tax is a destination-based tax on the supply of goods and services. It replaced many central and state indirect taxes with one framework, and began on 1 July 2017. The GST Council, with Centre and States, decides rates and rules, and GSTN provides the IT backbone.
- Taxes subsumed
- GST merged 17 taxes and 13 cesses into one framework, ending cascading of taxes.
- Destination principle
- Tax accrues to the State where goods or services are finally consumed. Alcohol for human consumption is outside GST.
- Dual structure
- Centre levies CGST and States levy SGST on intra-state supplies. IGST applies to inter-State supplies.
- GSTN ownership
- GSTN is a company owned 50% by the Centre and 50% by States. It runs the common digital platform.
- Taxpayer base
- Registered taxpayers rose from 66.5 lakh in 2017 to 1.65 crore in May 2026.
Don’t confuse with CGST/SGST vs IGST: CGST and SGST apply to supplies within a State. IGST applies to inter-State supplies.
Don’t confuse with Composition scheme vs QRMP: Composition lets small taxpayers pay a fixed rate on turnover. QRMP allows quarterly return filing with monthly payment, for turnover up to ₹5 crore.
Economy terms and data: 42 Prelims questions since 2013, rising in recent years; they test what a term or instrument means. In Mains, 12 news-triggered questions.
Why it matters
- Creates a common national market and cuts cascading of taxes.
- Wider base and digital tracking improve compliance and revenue predictability.
Problems
- Multiple slabs, classification disputes and compliance burden on small firms persist.
- Alcohol, petroleum and other items stay outside, limiting the single-tax goal.
Way forward
- Further rate rationalisation and bringing excluded items in with Council consensus.
- Expand data analytics for targeted enforcement while easing compliance for small taxpayers.
Put in your answer
Collections growth: Gross collection rose from about ₹13.76 lakh crore in 2021-22 to about ₹22.27 lakh crore in 2025-26.
Cooperative federalism: The GST Council brings the Centre and States together in decision-making.
Tech-driven administration: E-invoicing and the GSTN portal capture invoice data in real time and reduce mismatches.
- 2013Mains GS3 · Q10Rationale for introducing GST and reasons for delayed rollout.
- 2019Mains GS3 · Q1Indirect taxes subsumed in GST and its revenue implications.
- 2020Mains GS3 · Q12Rationale of GST Compensation Act and COVID-19's impact on it.
UPSC’s own questions that come close to this issue, from our Prelims and Mains banks.
No practice question for this one; the card may still help an answer. Why: Lasting topic on indirect taxation, but this is an anniversary explainer with no fresh decision; UPSC economy-term questions are 13% of news-linked Prelims.
Worth revising until Prelims 2028: most news questions come within two years of the event.