New Delhi | October 5, 2026
India’s Goods and Services Tax system is entering another phase of reform, with the focus shifting from rate rationalisation to simpler compliance, faster refunds and easier tax administration for businesses.
In a recent article, Finance Minister Nirmala Sitharaman highlighted the performance of GST following the rate changes introduced in September 2025 and outlined further process reforms expected to come before the GST Council.
GST Revenue and Economic Activity Rise
According to government data cited by Sitharaman, the value of reported taxable supplies increased 25.8% between October 2025 and July 2026 compared with the same period a year earlier.
Gross GST collections reached ₹12.46 lakh crore during April–September 2026, representing an 11.6% increase year-on-year. Net collections after refunds also rose by 10.4%.
The government has also reported that GST registrations reached approximately 17.1 million by the end of August 2026, nearly 15% higher than a year earlier.
Focus Shifts to Easier Compliance
The next phase of GST reform is expected to focus more heavily on the taxpayer experience.
Proposals being prepared for the GST Council include changes related to registration, returns, refunds, disputes and input tax credit, with the objective of reducing the time and administrative costs involved in compliance.
For small businesses and MSMEs, simpler procedures and quicker refunds could help improve working-capital management and make it easier to expand into markets outside their home states.
Two-Slab Structure Forms the Base
The Next-Gen GST framework introduced a simplified structure primarily centred on 5% and 18% rates, alongside a 40% rate for specified luxury and sin goods. The reforms took effect from September 22, 2025.
The broader objective is to reduce complexity while maintaining revenue sustainability for both the Centre and states.
What Comes Next for GST
The next stage will depend on how effectively tax simplification translates into lower compliance costs and more predictable administration.
With GST registrations, taxable supplies and collections continuing to expand, the government is positioning the tax system as an important part of India’s broader growth strategy. The upcoming GST Council discussions will determine how far the next round of process reforms goes.
