Indian tax and GST reform initiatives

The Indian government is pursuing structural tax reforms aimed at reducing litigation and simplifying compliance. Finance Minister Nirmala Sitharaman has emphasized a shift toward making voluntary compliance easier, utilizing schemes like ‘Vivad se Vishwas’ to settle long-standing disputes and raising monetary thresholds for departmental appeals.

Further efforts include the planned rationalization of individual income tax rates and the consolidation of the Goods and Services Tax (GST) into two primary rates by 2025 to minimize classification disputes. Following initial rate changes in September 2025, the next phase of GST reform focuses on process-related improvements. Recent data indicates significant growth in tax metrics, with total GST collections rising by 11.6 percent to 12.46 lakh crore rupees during the April-September 2026 period, alongside a 15 percent increase in GST registrations.

In October 2026, the Finance Minister announced a new phase of reforms intended to support the ‘Viksit Bharat’ economic vision. This stage targets improvements in GST registration, return filing, refunds, dispute resolution, and the flow of input tax credits. The 57th GST Council meeting, chaired by Sitharaman, was rescheduled from October 7 to October 8 due to ‘unavoidable circumstances.’

During the 57th meeting in New Delhi, the Council is expected to discuss procedural improvements to reduce the time and cost of tax obligations. Key agenda items include registration, return filing, refund processes, and Input Tax Credit (ITC) regulations. The Council may also consider Law Committee recommendations to simplify GST laws, specifically by distinguishing between intentional tax evasion and unintentional delays or shortfalls. Discussions are also expected to cover compliance measures for e-commerce operators and small businesses.