Kolkata: July 1, 2017: GST introduced in India
September 3, 2025: GST reform introduce a two-slab regime
The moot question now: What is the future of GST? Will India eventually move to a single-rate GST? None knows for sure but the natural progression of taxation is from complex to simple structures. With the two-slab indirect taxation announced, there is only one way towards which GST can move forward in India. The introduction of GST in 2017 has often been described as the most significant tax step in Independent India. The GST reforms announced by the Centre on Wednesday night is quite easily the most significant modification to this tax since then.
Some tax officials are saying that GST 2.0 must serve as a precursor to one single nationwide slab unifying all goods and services under it. It will result in maximum ease of business as far as taxation is concerned and improve compliance. By the way, the two slabs that India will be moving into are 5% and 18%, while a peak 40% has been prescribed for a few sin and luxury goods such as tobacco products, aerated and carbonated drinks, big cars etc.
Think Change Forum report
A report by Think Change Forum titled ‘GST 2.0: Two Slabs Today, One Rate Tomorrow’ has already suggested a move towards a single-rate GST regime. The point is, while a purist would demand a single rate of GST as a literal implication of one nation one tax formula, a single rate is also the simplest form that one can hope for.
“The real reform lies in simplification — two slabs today, and eventually one rate tomorrow. That is the path to higher compliance, fewer distortions, and sustainable revenue growth,” Nilanjan Banik, professor at Mahindra University and author of the report has said at an event.
Think Change Forum Secretary General Ranganath T said the peak rate of GST should be 18% and it gradually all items should converge to a single rate. Transparency and predictability should be the focus of the system, he added.
In a recent interview former deputy chairman of the Planning Commission Montek Singh Ahluwalia has indicated that a single rate GST is workable. Incidentally, nearly 170 of the 193 countries have implemented GST. The first country to introduce GST was France in 1954.
The gross GST revenue in India for FY25 stood at Rs 22,08,000 crore, which marked an annual growth rate of 9.4% YoY growth, government data showed. The GST collection every month on average stood at Rs 1,84,000 crore.