{"@context":"https:\/\/schema.org\/","@type":"BlogPosting","@id":"https:\/\/www.indusind.com\/iblogs\/trends\/gst-day-history-significance-impact-on-the-indian-economy\/#BlogPosting","mainEntityOfPage":"https:\/\/www.indusind.com\/iblogs\/trends\/gst-day-history-significance-impact-on-the-indian-economy\/","headline":"GST Day 2025: History, Significance, and Impact on the Indian Economy","name":"GST Day 2025: History, Significance, and Impact on the Indian Economy","description":"Every year, 1st July rolls around as a reminder of one of the biggest tax reforms in India\u2019s history\u2014GST Day. Launched in 2017, the Goods and Services Tax didn\u2019t 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...","datePublished":"2025-06-20","dateModified":"2025-06-20","author":{"@type":"Person","@id":"https:\/\/www.indusind.com\/iblogs\/author\/indusind_bank_pfx_team_indperformics-com\/#Person","name":"CONVONIX Antony","url":"https:\/\/www.indusind.com\/iblogs\/author\/indusind_bank_pfx_team_indperformics-com\/","image":{"@type":"ImageObject","@id":"https:\/\/secure.gravatar.com\/avatar\/7d15b864167d3868c12ffdda340cc1c9?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/7d15b864167d3868c12ffdda340cc1c9?s=96&d=mm&r=g","height":96,"width":96}},"publisher":{"@type":"Organization","name":"IndusInd","logo":{"@type":"ImageObject","@id":"https:\/\/www.indusind.com\/iblogs\/wp-content\/uploads\/logo-2.png","url":"https:\/\/www.indusind.com\/iblogs\/wp-content\/uploads\/logo-2.png","width":201,"height":86}},"image":{"@type":"ImageObject","@id":"https:\/\/www.indusind.com\/iblogs\/wp-content\/uploads\/Goods-Services-Tax-GST.jpg","url":"https:\/\/www.indusind.com\/iblogs\/wp-content\/uploads\/Goods-Services-Tax-GST.jpg","height":288,"width":764},"url":"https:\/\/www.indusind.com\/iblogs\/trends\/gst-day-history-significance-impact-on-the-indian-economy\/","about":["Trends"],"wordCount":2052,"articleBody":"Every year, 1st July rolls around as a reminder of one of the biggest tax reforms in India\u2019s history\u2014GST Day. Launched in 2017, the Goods and Services Tax didn\u2019t 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 \u201cOne Nation, One Tax.\u201d But more than anything, GST Day is a moment to pause and reflect\u2014on 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\u2019t just another policy change\u2014it 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\u2019s economic playbook. It also doubles as an opportunity for the government, tax professionals, and businesses to take stock of how GST is evolving\u2014and where it\u2019s headed next.When is GST Day Celebrated in India?GST Day is celebrated on the 1st of July every year. That\u2019s 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\u2014exactly one year after the tax reform went live.What\u2019s the idea behind it? Three things, mainly:To spotlight GST\u2019s role in unifying the tax systemTo recognise the efforts of everyone involved\u2014from policymakers to businessesAnd to encourage awareness and better compliance across the boardAlso Read: RBI Slashes Repo Rate to 5.5%: Here\u2019s What You Should KnowKey Milestones in India\u2019s GST JourneyYou know the saying\u2014Rome wasn\u2019t built in a day. Well, neither was GST.India\u2019s 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\u2019s how the pieces came together:YearMilestone2000A committee of State Finance Ministers\u2014called the Empowered Committee\u2014is set up to explore GST.2006Then Finance Minister P. Chidambaram proposes a rollout date: April 1, 2010.2009The Empowered Committee releases India\u2019s first discussion paper on GST.2010President Pranab Mukherjee formally announces a delay in implementation, pushing the proposed rollout to April 2011.2011The Constitution (115th Amendment) Bill is introduced in the Lok Sabha and sent to the Standing Committee for review.2013The Standing Committee submits its report, laying the foundation for further reforms.2014The earlier Bill lapses because of the Lok Sabha’s dissolution. A new Constitution (122nd Amendment) Bill is introduced in Parliament.2015The Bill passes in the Lok Sabha, goes to a Select Committee in the Rajya Sabha, and receives suggestions on tax rates.2016The Constitution (101st Amendment) Bill is passed. Assam becomes the first state to ratify it. The GST Council is formed.2017Four key GST Bills are passed. Tax rates and cess structures are finalised. GST is officially rolled out on 1st July.2018TDS provisions and the e-way bill system for interstate goods are introduced.2019Reverse charge becomes applicable. New rules limit the availment of ITC under Section 36(4).2020Voluntary e-invoicing begins. QRMP scheme is introduced. Relief measures are announced during COVID-19.2021GSTR-8 is introduced. GST now applies to services supplied via e-commerce platforms and loan guarantees by state governments.How has GST Changed the Game for India\u2019s Economy?Now that GST\u2019s been around for a few years, we\u2019ve seen some clear shifts\u2014some good, some still evolving.1. It simplified a tangled web of taxesRemember VAT, service tax, excise duty, octroi, and all those state-level levies? GST replaced them with one unified system. That\u2019s a big win for businesses trying to keep track of tax filings.2. It boosted compliance and collectionsWith input tax credit and digital filing in place, businesses have stronger incentives to report honestly. Monthly GST collections in March 2024 stood at \u20b91.78 lakh crore, showcasing 11.5% YoY growth, which is not a minor feat.3. It made doing business across states smootherGoods can now move across borders without logistical nightmares. MSMEs especially benefit, as GST reduces the friction of inter-state trade.4. It encouraged formalisationMore businesses are registering under GST, particularly with thresholds and e-invoicing in place. That\u2019s nudging parts of the informal sector into the mainstream economy.Quick Note: While GST has definitely got meaningful results, there are still compliance hiccups\u2014especially for small businesses navigating changing rules and returns.Also Read: First Advance Tax Payment Due on 15th June: What You Need to KnowInteresting Facts About GSTHere are a few lesser-known facts that shed light on the history and uniqueness of India\u2019s GST model:France was the first country to implement a GST system. It introduced VAT-style taxation in the 1950s\u2014long before others caught on.India\u2019s 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.GST was first proposed in India in 1999. PM Atal Bihari Vajpayee supported the idea early on, earning him the nickname Father of GST.Assam was the first state to ratify the GST Bill. Yep, the North-East led the way on this one.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.GST has five main tax slabs. These are 0%, 5%, 12%, 18%, and 28%. Precious goods like gold have their own special rates.There are two types of GST for intra-state sales\u2014CGST and SGST\/UTGST\u2014and IGST for inter-state deals. This structure keeps revenue-sharing between the Centre and States fair.Amitabh Bachchan was roped in as GST\u2019s brand ambassador. Bollywood meets tax reform? Only in India.Notable Quotes on GSTOver the years, India\u2019s 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:\u201cIt (GST) was not a very easy reform to implement\u2026 Our next generation will be horrified with the idea of what originally our indirect tax system was.\u201d \u2014 Arun Jaitley, Former Union Finance Minister of India (Source)This quote reflects the complexity of India\u2019s pre-GST tax structure and the scale of reform undertaken in 2017.“GST is Good and Simple Tax.” \u2014 Prime Minister Narendra Modi (at the midnight rollout ceremony, 1st July 2017) (Source)This concise phrase succinctly captured the government\u2019s key messaging at the launch: simplicity and broad applicability.” GST is the embroidery that stitches the diversity of Indian markets into the fabric of economic progress. The GST Council meetings have become the shining examples of cooperative federalism, where the Centre and States have deliberated, discussed, and decided on various complex issues to make GST more responsive and nuanced. Even today, and certainly in the future, the success of GST is predicated on the feedback loop between the taxpayer and the department. ” \u2014 Nirmala Sitharaman, Union Finance Minister (during GST Day 2023 2017) (Source)Here, the finance minister referenced GST\u2019s role in unifying diverse state economies under a cooperative framework.Wrapping Up!As India marks GST Day 2025, it\u2019s not just about a date on the calendar\u2014it\u2019s about how far we\u2019ve 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\u2019s for sure\u2014it\u2019s here to stay, and it\u2019s shaping the future of doing business in India.Share This:"}