GST turns 8: PwC calls for bold GST 2.0 overhaul as collections soar, challenges persist

Eight years since its rollout, the Goods and Services Tax (GST) has become one of India’s most significant fiscal reforms, streamlining indirect taxation and improving revenue efficiency. A new PwC report highlights the gains made through digitisation, compliance improvements, and stakeholder feedback, but also signals an urgent need for a second wave of reforms, labelled as GST 2.0.

GST collections have doubled since inception. The average monthly collection rose from ₹0.9 lakh crore in 2017–18 to ₹1.84 lakh crore in 2024–25. A record ₹2.37 lakh crore was collected in April 2025, up 12.6% year-on-year, driven by strong import and domestic sales activity. This rise is attributed to better enforcement, AI-driven compliance systems, and real-time invoicing. India’s GST model, the report says, is now among the most advanced in the world, as per the report.

However, challenges remain. Key sectors like petroleum continue to stay outside the GST net. Complex compliance rules and frequent disputes over input tax credits still disrupt the ease of doing business. Though the GST Appellate Tribunal (GSTAT) has been constituted, delays in appointing members are holding back the faster resolution of tax disputes. The report notes that GSTAT is expected to reduce the burden on High Courts, with fully digital processes from filing to final orders, the report noted.

There have also been several positive policy interventions. Clarifications on issues like input tax credit, Online Information Database Access and Retrieval services (OIDAR) services, and cross-charges helped businesses. Notably, the introduction of Section 11A in the GST law now allows waiver of tax dues in cases of genuine business interpretations.

The data reveals that while collections dipped during the COVID-hit 2020–21 (–6.99%), they bounced back sharply in 2021–22 (+30.91%) and continued steady growth thereafter, underlining economic resilience and formalisation of trade.

Looking ahead, the report recommends five focus areas for GST 2.0: rationalising rates, removing blocked credits, building a trust-based audit system, taxing emerging sectors like online gaming and EVs, and enhancing digital infrastructure. Including petroleum products under GST, the report notes, is vital but politically sensitive due to state revenue concerns.

With India targeting a globally competitive tax regime by GST@10 in 2027, the next phase must prioritise simplification, consistency, and speed in resolving disputes. Advanced tech tools, global practices, and inclusive frameworks are crucial for realising GST’s full potential as a growth and investment enabler in the Amrit Kaal era, as per the report.