GST Day 2025: History, Significance, and Impact on the Indian Economy

Posted on Friday, June 20th, 2025 | By IndusInd Bank

Every year, 1st July rolls around as a reminder of one of the biggest tax reforms in India’s history—GST Day. Launched in 2017, the Goods and Services Tax didn’t just replace a bunch of old indirect taxes; it redefined how India does business.

For entrepreneurs, consumers, and government departments alike, GST brought simplicity, accountability, and a step closer to “One Nation, One Tax.” But more than anything, GST Day is a moment to pause and reflect—on the journey so far, the bumps along the road, and the potential that still lies ahead.

What is GST Day in India?

GST Day marks the nationwide rollout of the Goods and Services Tax on 1st July 2017. It wasn’t just another policy change—it was the end of an era where each state followed its own tax rules.

The day is observed to appreciate this turning point in India’s economic playbook. It also doubles as an opportunity for the government, tax professionals, and businesses to take stock of how GST is evolving—and where it’s headed next.

When is GST Day Celebrated in India?

GST Day is celebrated on the 1st of July every year. That’s the day GST officially came into effect across the country in 2017, after years of policy debates and cross-party consultations.

Who Introduced GST Day and Why?

The Ministry of Finance formally introduced GST Day, with the first celebration held on 1st July 2018—exactly one year after the tax reform went live.

What’s the idea behind it? Three things, mainly:

• To spotlight GST’s role in unifying the tax system
• To recognise the efforts of everyone involved—from policymakers to businesses
• And to encourage awareness and better compliance across the board

Also Read: RBI Slashes Repo Rate to 5.5%: Here’s What You Should Know

Key Milestones in India’s GST Journey

You know the saying—Rome wasn’t built in a day. Well, neither was GST.

India’s path to implementing a unified tax system spanned nearly two decades. It involved countless committee meetings, bills tabled (and withdrawn), and a whole lot of negotiation between states and the Centre.

Here’s how the pieces came together:

How has GST Changed the Game for India’s Economy?

Now that GST’s been around for a few years, we’ve seen some clear shifts—some good, some still evolving.

1. It simplified a tangled web of taxes

Remember VAT, service tax, excise duty, octroi, and all those state-level levies? GST replaced them with one unified system. That’s a big win for businesses trying to keep track of tax filings.

2. It boosted compliance and collections

With input tax credit and digital filing in place, businesses have stronger incentives to report honestly. Monthly GST collections in March 2024 stood at ₹1.78 lakh crore, showcasing 11.5% YoY growth, which is not a minor feat.

3. It made doing business across states smoother

Goods can now move across borders without logistical nightmares. MSMEs especially benefit, as GST reduces the friction of inter-state trade.

4. It encouraged formalisation

More businesses are registering under GST, particularly with thresholds and e-invoicing in place. That’s nudging parts of the informal sector into the mainstream economy.

Also Read: First Advance Tax Payment Due on 15th June: What You Need to Know

Interesting Facts About GST

Here are a few lesser-known facts that shed light on the history and uniqueness of India’s GST model:

1. France was the first country to implement a GST system. It introduced VAT-style taxation in the 1950s—long before others caught on.
2. India’s GST structure is inspired by Canada. Like India, Canada uses a dual model where both federal and provincial governments levy tax on the same base.
3. GST was first proposed in India in 1999. PM Atal Bihari Vajpayee supported the idea early on, earning him the nickname Father of GST.
4. Assam was the first state to ratify the GST Bill. Yep, the North-East led the way on this one.
5. The GST Council was set up in September 2016. Under Article 279A of the Constitution, it plays a key role in rate-setting and dispute resolution.
6. GST has five main tax slabs. These are 0%, 5%, 12%, 18%, and 28%. Precious goods like gold have their own special rates.
7. There are two types of GST for intra-state sales—CGST and SGST/UTGST—and IGST for inter-state deals. This structure keeps revenue-sharing between the Centre and States fair.
8. Amitabh Bachchan was roped in as GST’s brand ambassador. Bollywood meets tax reform? Only in India.

Notable Quotes on GST

Over the years, India’s transition to the Goods and Services Tax (GST) has sparked commentary from policymakers, economists, and industry leaders.

Here are a few notable quotes that capture the spirit, challenges, and aspirations tied to this landmark reform:

This quote reflects the complexity of India’s pre-GST tax structure and the scale of reform undertaken in 2017.

This concise phrase succinctly captured the government’s key messaging at the launch: simplicity and broad applicability.

Here, the finance minister referenced GST’s role in unifying diverse state economies under a cooperative framework.

Wrapping Up!

As India marks GST Day 2025, it’s not just about a date on the calendar—it’s about how far we’ve come. GST has simplified the tax ecosystem, improved transparency, and nudged India toward a more formal economy. Of course, the journey is far from over. With every tweak, every Council meeting, and every tech upgrade, GST is still finding its feet. But one thing’s for sure—it’s here to stay, and it’s shaping the future of doing business in India.