A recent survey indicates that businesses maintain a positive outlook on GST after nine years, emphasizing the need for simplified compliance and reduced disputes.
New Delhi, India Jul 9, 2026 ALN: New Delhi: The overall sentiment of businesses towards GST remains positive after nine years of its implementation, but addressing compliance complexities and reducing litigation will be critical to strengthening the ease of doing business and unlocking the full potential of the goods and services tax, a survey said on Thursday.
The KPMG in India-FICCI GST Survey stated that GST has matured considerably through greater digitisation and transparency, creating a more unified and efficient indirect tax framework. The introduction of GST was a landmark reform in India's taxation system, aimed at simplifying the complex web of indirect taxes that existed prior to its implementation. By subsuming various central and state taxes, GST aimed to create a single market across the country, fostering ease of movement for goods and services.
Businesses continue to prioritize simplification, certainty, faster dispute resolution, seamless credit flow, and technology-enabled compliance as critical areas for reform. The survey highlights that businesses are seeking simplification, certainty, faster refunds, seamless input tax credit flow, and more effective dispute resolution as GST enters its next phase of reform. Enabling unfettered input tax credit flow, correcting inverted duty structures, and enhancing certainty in tax administration are also essential. These areas of focus reflect ongoing challenges that businesses face in navigating the GST landscape, which, despite its advantages, has also introduced complexities that can hinder operational efficiency.
"Nine years after its introduction, GST stands as a reform that has unified India's indirect tax framework and driven transparency and digital adoption."
Going forward, addressing compliance complexities, enabling unfettered credit flow, correcting inverted duty structures, and enhancing certainty in tax administration will be critical to strengthening ease of doing business and unlocking the full potential of GST. The survey indicates that while the overall framework has improved, businesses are still grappling with issues that can lead to disputes and inefficiencies.
GST, which subsumed 17 indirect taxes and 13 cesses, was rolled out on July 1, 2017. The initial years of GST implementation were marked by significant challenges, including technical glitches in the GST portal, confusion regarding compliance requirements, and a steep learning curve for businesses adapting to the new system. However, over the years, the government has made concerted efforts to address these issues through various amendments and updates to the GST framework, leading to greater stability and predictability.
About 53 percent of survey respondents reported that tax administration has evolved towards a more collaborative approach; however, industry feedback on interactions with tax authorities remains mixed, with 47 percent highlighting variation in interpretation and implementation. This indicates that while there has been progress in fostering a cooperative spirit between businesses and tax authorities, discrepancies in the application of GST rules can still create confusion and uncertainty for businesses trying to comply with the law.
As per the survey, 72 percent rated GSTAT benches as moderately accessible, while 76 percent described the GSTAT appeal process and digital platform as moderately effective. The GST Appellate Tribunal (GSTAT) was established to provide a mechanism for resolving disputes arising from GST assessments and claims. However, the perception of accessibility and effectiveness suggests that there is still room for improvement in making the dispute resolution process more user-friendly and efficient.
Among future GST reform priorities, respondents identified effective utilization of GST credits across GSTINs, rationalization of the ITC framework, and inclusion of oil and gas within the GST framework as key areas. The Input Tax Credit (ITC) mechanism is a crucial component of GST, allowing businesses to reclaim taxes paid on inputs used in the production of goods and services. However, the complexities surrounding ITC claims can create significant hurdles for businesses, particularly when it comes to cross-state transactions or varying interpretations of eligibility. The inclusion of oil and gas in the GST framework has been a long-standing demand from various sectors, as these commodities are currently subjected to separate taxation regimes, leading to inefficiencies and higher costs for businesses reliant on these resources.
Resolution of inverted duty structure, including refunds of accumulated credit on input services and capital goods, emerged as a key industry ask to ease working capital constraints and support business competitiveness. An inverted duty structure occurs when the tax rate on inputs is higher than the tax rate on the final product, resulting in excess input tax credits that businesses cannot utilize effectively. This situation can strain cash flows and hinder business operations, particularly for industries with high capital expenditures.
KPMG in India Partner and Co-Chair of FICCI Taxation Committee Rajeev Dimri stated that the survey reflects the significant progress GST has made in supporting ease of doing business by creating a unified national market and enhancing transparency across industries. The establishment of a standardized tax regime has not only simplified compliance for businesses but has also contributed to greater revenue collection for the government, as it reduces tax evasion and promotes accountability.
"At the same time, industry continues to seek greater simplification, faster dispute resolution, rationalized input tax credit provisions, and a more predictable tax environment. Addressing these priorities through a taxpayer-friendly and business-centric GST framework will be important to improving competitiveness, supporting investment, and sustaining long-term growth," Dimri said.
The implications of these findings are significant for policymakers and business leaders alike. As the GST framework evolves, there is a pressing need for continued dialogue between the government and the business community to ensure that reforms are responsive to the needs of industries. Enhancing the efficiency and effectiveness of the GST system will not only support business growth but also contribute to the overall development of the country.
In conclusion, while the sentiment towards GST has improved over the past nine years, ongoing reforms focused on simplification, dispute resolution, and effective credit utilization will be essential to fully realize the benefits of this transformative tax system. The commitment to continuous improvement and responsiveness to industry feedback will be vital in shaping the future of GST in India, ensuring it remains a tool for growth and competitiveness in an increasingly complex global marketplace.
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