The biggest indirect tax reform of Independent India, the Goods & Services Tax ( GST) completes ten years. It has been a momentous nine years. GST created an integrated national market, removed the cascading effect of taxes, harmonized rules and procedures, dramatically increased the taxpayer base from 67.80 lakh to 1.65 crore.
Average GST revenue collection touched anywhere between ₹1.80 crore to ₹1.85 lakh crore up from the average of under ₹1 lakh crore in the pre-GST era. The issue of multiplicity of slabs which was a major area of concern has been addressed along with rate rationalisation. The GST Tribunal has been put in place and hopefully will have the necessary wherewithal to adjudicate the more than 4.5 lakh pending appeals soon.
The technology framework, GSTN has more or less settled down. AI and ML are ensuring a robust data analysis which is strengthening the enforcement machinery. The GST Council continues to be a shining example of cooperative federalism. However, in the euphoria of acknowledging the enormous positives of GST we should not forget to take a step back and analyse what more needs to be done, to understand and address the concerns of the States, the crucial partners in this reform.
Tamil Nadu has been in the forefront of raising several concerns about GST. The Government of Tamil Nadu constituted a Committee under Justice Kurian Joseph to examine Centre-State relations; the Committee Report, which was submitted on February 2, 2026, has also dealt extensively with GST and made several recommendations. Not all are perhaps valid and would in effect call for revisiting many of the decisions taken during the various GST Council meetings after due deliberation. Nevertheless, the recommendations deserve an examination by the Centre — because it does reflect the vocal views of the opposition ruled States and one suspects also of the ruling party ruled States.
The Report recommends ‘targeted amendments’ of Article 279A of the Constitution, the very heart of the GST reform. Amendments have been suggested of Clauses 7 and 9. Clause 7 specifies the required quorum (one half of the total members); clause 9 specifies requirement of three-fourths of the weighted votes for a decision to be passed. The weightage to be given in the event a vote is required to approve a decision is one third for the Center and two-thirds for the States. The Report recommends that this be amended.
Multiple options have been given all designed to reduce the perceived influence of the Centre.
Further there is a recommendation that the current ‘one State, one Vote’ mechanism be replaced with a weightage allocation based on various other parameters. The Report misses a crucial fact — not once in all the 56 GST Council meetings was there a need to put a decision to vote. All decisions were taken by consensus. The voting weightage is such that no one entity— Centre or State, has an undue advantage. So, the recommendation based on an apprehension that the Centre has an undue advantage is misplaced.
Taking the cue from the Apex Court decision in Mohit Minerals (2022) it has been suggested that the Article 279A should be amended to expressly clarify that the Councils recommendations are recommendatory only and similarly to remove the requirement that rules be made on the Council’s recommendations. These suggestions if carried out will destroy the very USP of GST of one nation, one law.
Yet another amendment in Article 279A has been suggested to provide for a joint standing committee of Parliament and State Legislatures to act as a ‘federal legislative counterweight’. Such a committee will lack the agility to take decisions and will only act as an impediment. The other amendment suggested again in Article 279A is to create an independent GST Dispute Settlement Authority chaired by a Supreme Court Judge.
This was something also recommended by the Rajya Sabha Select Committee and could be revisited again. There is a suggestion to rotate the chair of the GST council among State ministers; Article 279A makes the Union Finance Minister the Chairperson. This suggestion is again good optics but not practical.
The Report suggests the need to stabilise the GST Rate policy. It calls for institutionalisation predictability, simplicity, discipline. It suggests one product, one rate principle, the need to consolidate rate changes into an Annual Rate Calendar notified once a year and to end ad-hoc tinkering. It suggests that procedural reforms to be released once a year and that tariff rate changes should be vetted by a permanent, autonomous committee to prevent gaming. These are suggestions worth considering.
The GST Council is certainly guilty of being too responsive to the needs of industry-which results in frequent rate changes which can be challenging for industry to cope up with. I am sure the Centre and the Secretariat will be delighted to have an annual calendar of rate changes. It is unlikely that all States will agree to this.
Yet another suggestion is to give States the freedom to vary SGST rates within a 2-percentage point band; again, this is anathema to the very concept of GST. There is a suggestion to establish a permanent GST Council secretariat independent of the Union Finance Ministry, reconstitute the technical committee with 15 representatives from States and 2 from the Centre, all decisions to be made by a three-fourth majority.
All these suggestions seem to be stemming from a deep distrust of the Centre and would stymie the very functioning of the Council. The Report suggest that inclusion of petroleum products be deferred until the reforms are carried out-this is misconceived. The exclusion of petroleum products is an aberration and adds to costs.
It has been suggested that GSTN is far too centralised and should be decentralised on the lines of UPI where the back end is unified while the front end is decentralised. Too much of time, effort and money has gone into making GSTN which has settled down admirably for the very architecture to be reopened now.
There is a suggestion to do away with GSTR-3B the self-assessment return. This is worth considering for after all it was introduced as a temporary measure to address the inadequacies of the system to handle GSTR -2 (where buyers confirm the entries made by the sellers in GSTR-1) and GSTR-3 (where the system auto-computes net liability). Consequently, the matching of invoices which GSTR -2 and GSTR-3 were designed to provide has been compromised. Subject to GSTN being ready to handle the change, this is a recommendation worth considering.
The whole thrust of the Report has been from a deep sense of grievance about the loss of the State’s autonomy , about the belief that tax buoyancy has declined and total revenues have come down. The Report also finds fault with the rationalization of rates, suggesting this too has contributed to decline in revenues!
Ultimately tax reforms are aimed at the taxpayer. We should not forget that the last Survey conducted by Deloitte captures the industry sentiment, all of whom have given a thumping thumb -up to the simplification which GST has ushered, and which has earned broad based stakeholder confidence.
The author, Najib Shah, is former Chairman (Retired), Central Board of Indirect Taxes & Customs (CBIC).
