9 YEARS OF GST- ACHIEVEMENTS AND CHALLENGES IN THE GST REGIME

by Ramesh Chandra Jena, B. A (Hons)., M.A (Eco)., D.M.M., LL.B. ADVOCATE & TAX CONSULTANT

The GST regime has been completed nine years of its journey from the day of implementation. The Government has been notified several amendments in the CGST Acts & CGST Rules for the simplification in the GST regime as per the recommendations of GST Council. The GST Council also successfully already have conducted about 56th meetings in the last nine years and recommended several beneficial measures to the Government for implement as a part of ease of doing business.

Major Achievements in the year 2024-2025:

1. GST 2.0: Reforms: The Government has brought several changes in GST 2.0: reforms with effect from 22nd September’2025 as per the recommendations of the GST Council. GST 2.0: reforms in the provisions of GST, Policy measures and procedures in order to improve ease of doing business and path maker of GST reforms 2.0: are indeed landmark milestone events in the history of Goods and Services Tax (GST) in India with multi-dimensional economic growth of the country. GST reforms a boon for agriculture, farmers’ prosperity, middle class, insurance sectors, health care and pharmaceuticals sectors, infrastructure, MSME sectors and housing sectors. Consequently, trade facilities measures are boost for the demand of goods and services, resulting impact on GDP, economic growth of the country.
2. Rationalisation of tax structure: The 56th GST Council meeting recommendations made an historic event in the era of GST regime and an important foundation for future tax reforms. GST 2.0 reforms rationalisation of tax rates of Goods and Services and simplify the tax structure. The earlier four slabs of GST Rates 5%, 12%, 18% and 28% has been minimized to only two slabs i.e. one slab of Rate is 5% for essential goods or mass consumption goods and another standard Rate is 18% for most of the other goods and services and additionally a special Rate of 40% for luxurious and sin goods. The reduced number of tax rate slabs will help reduce litigation and classification woes.
3. Removal of Compensation Cess: The Compensation has been abolished with effect from 22nd September, 2025 vide Notification No. 02/2025-Compensation Cess (Rate) dated 17.09.2025. The compensation Cess was introduced under GST to compensate states for revenue losses incurred due to the implementation of GST. However, the Compensation cess has been continued to be levied on tobacco and related products and sin goods.
4. New Section 74A of CGST Act: As per Finance Act, 2025, has inserted a new section 74A in the Central Goods and Services Tax Act, so as to provide for determination of tax not paid or short paid or erroneously refunded or input tax credit wrongly availed or utilised for any reason pertaining to the Financial Year 2024-25 onwards as per recommendation of 53rd GST Council meeting.
5. Launch of Simplified GST registration:
   • The CBIC has notified procedures for grant of registration electronically with effect from 1st November,2025 vide Notification No.18/2025-Central Tax, dated 31st October,2025 and the amendment rules are reproduced as under:
   • “9A. Grant of registration electronically.-Notwithstanding anything contained in rule 9, any person who has applied for registration under rule 8 or rule 12 or rule 17, shall, upon identification on the common portal based on data analysis and risk parameters, be granted registration electronically by the common portal, within three working days from the date of submission of application.
   • Thus, with the mandatory upon successful authentication of Aadhar number, the applicant shall be granted registration electronically by the common portal, within three working days from the date of submission of application.
6. Launch of GSTAT: The Union Minister of Finance and Corporate Affairs Smt. Nirmala Sitharaman formally has launched Goods and Services Tax Appellate Tribunal (GSTAT) in New Delhi on 24th September, 2025. Consequent to 56th GST Council meeting recommendation that the Goods and Services Tax Appellate Tribunal (GSTAT) has been made operational for accepting appeals online from end of September on the GSTAT portal. The launch of GSTAT marks a major milestone in the evolution of the Goods and Services Tax regime and strengthens the institutional framework for indirect tax dispute resolution in the country.
7. Time limit of filing Appeal before GSTAT: GSTAT has clarified vide instruction that such orders of the Appellate authorities or revisional authorities sought to be appealed before the appellate tribunal where the Appeal in Form GST APL-01 or GST APL-03 or notice in Form GST RVN-01 filed or, as the case may be, issued on the common portal on or before 31.03.2026. The filing window has been opened from 31st December 2025 and will expire on June 30, 2026. However, considering the difficulties being faced by the appellants in the initial phase for filing of appeals on the GSTAT Portal, in case of defective Appeals, shall be filing followed till 31st December, 2026, for ease of filing appeal by the Appellants.
8. Reduction of Pre-deposit for filing Appeal before GSTAT: Section 112(8) has been amended as per the recommendation of 53rd GST Council meeting, wherein reduce pre-deposit from 20% to 10% with effect from 1st August, 2024 onwards as per the Finance Act, 2024. This has been reduced transaction cost of the taxpayers and also reduces the maximum amount of pre-deposit for filing appeals before the Appellate Tribunal from fifty crores to rupees twenty crores in central tax.
9. Reduction of mmaximum pre-deposit amount for filing Appeal before the Appellate Authority: As per recommendation of 53rd GST Council meeting, section 107(6) of the CGST Act, has been amended so as to reduce the maximum amount of pre-deposit for filing appeal before the Appellate Authority from rupees twenty-five crores to rupees twenty crores in central tax.
10. Authority of Anti-profiteering Authority shifted: As per the recommendation of 53rd GST Council meeting the provision of Anti-profiteering under section 171(2) of CGST Act has been amended the word “Authority” to “Appellate Tribunal” so the anti-profiteering cases has been shifted from CCI to Principal bench of GSTAT.
11. Intermediary Services redefined: As per the recommendation of 56th GST Council meeting, the place of services for intermediary supply of services has been omitted the specific provision under Section 13(8)(b) of the IGST Act relating to determination of place of supply of intermediary services. Upon such omission, the place of supply of intermediary services has been determined as per the default provision in Section 13(2) of the IGST Act i.e., the location of the recipient of services.
12. Provisional refund mechanism for zero-rated supplies: The 56th GST council has recommended to amend Rule 91(2) of the CGST Rules so as to permit sanction of 90% of the refund claimed as provisional refund on the basis on a system-driven risk evaluation, in respect of zero-rated supplies (exports of goods or services, or supplies to SEZ units/developers for authorised operations). In cases categorised as high risk, the proper officer may, after recording reasons in writing, withhold provisional sanction and subject the refund application to detailed scrutiny. The proper officer shall make an order in FORM GST RFD-04, within a period not exceeding seven days from the date of the acknowledgement under sub-rule (1) or sub-rule (2) of rule 90: Provided that the proper officer, for reasons to be recorded in writing, may not grant refund on provisional basis and proceed with the order under rule 92: The revised provision has been effected from 01-11-2025.
13. End of provision of compensation cess: The Compensation Cess has been abolished with effect from 22nd September, 2025 vide Notification No. 02/2025-Compensation Cess (Rate) dated 17.09.2025. The compensation Cess was introduced under GST to compensate states for revenue losses incurred due to the implementation of GST. However, the Compensation cess will continue to be levied on tobacco and related products and sin goods
14. Amnesty Scheme for Time barred Appeals: There are large numbers of time barred Appeals are pending for filing by the taxpayers before the GSTAT u/s 112. The taxpayers have failed to file to Appeal before the first Appellate Authority under section 107(1) of the CGST Act, 2017 within statutory time limit of filing. Consequently, the first Appellate Authority has rejected numbers of Appeal, which were filed beyond the statutory time limit of three months plus one month for condonation of delay. The reasons for not filing of Appeal before the first Appellate Authority within statutory time limit by the taxpayers due to delay of communication of show cause notice and assessment Order, wherein the provision under section 169 of the Act, has been failed. The proper officer contention is that once show cause notices and order were uploaded on common portal means the same has been served to the taxpayer. Thus, this is the big tax before the Government to allow time barred Appeals by introducing one time Amnesty Scheme for time barred Appeals as per the recommendation of the GST Council.
15. Extension of time for filing Appeals before the GSTAT: Even though GSTAT has been made operational for filing Appeals from December, 2025 after nine years of implementation of GST in the country. The long awaited of formation of GSTAT has resulted piling of more than 2 lacs of Appeals for filing across the country and these Appeals are required to file before 30th June, 2026. But the way the GSTAT portal is working and technical glitches only about 20 thousands of Appeals have been filed since last six months. One should imagine how much time is required to file about 2 lacs Appeals in GSTAT portal. It is high time; the Government has to take action for the extension of time limit for another 3 months for filing Appeals before GSTAT. The extension of time limit for filing Appeals only relating to the orders of first Appellate Authority or Revisional Authority have passed till 31st March, 2026. So that the taxpayers will get benefits for filing Appeals beyond time limit of 30th June, 2026, so that GSTAT portal will be normalized for operation within few months.

Legal Challenges (Measures pertaining to law and procedures)

1. Relaxation in time limit of section 16(4): The Government had relaxed time limit for availing ITC in respect of any invoice or debit note filed return in GSTR-3B upto 30-11-2021 by inserting section 16(5) of the Act as per the recommendation GST Council for the financial year 2017-18 to 2020-2021 thereby reduce litigation of mismatch of ITC between GSTR-3B Vs. GSTR-2A. But the similar difficulties of availing ITC within statutory time limit u/s 16(4) are being faced by the taxpayers for the financial years 2021-2022, 2022-2023 and 2023-2024, the issue may be taken care by the Government with approval of GST council for amending section 16(4) retrospectively w.e.f. 01-12-2021 to enable to the taxpayers to avail ITC beyond extended time limit by inserting new provision under GST law.
2. Section 74 cannot be invoked mechanically:
   • In the GST regime there have been high-pitched demands invoked section 74 of the CGST Act, 2017, tax can be recovered u/s 74 only when there is fraud or suppression or wilful statement on the part of the taxpayer.However, the field officers invariably adopting recovery of tax extending limitation of a five year period.
   • The Hon’ble Supreme Court in the matter of C.C., C.E. & S.T. v. Northern Operating Systems Pvt. Ltd., reported in 2022 (61) G.S.T.L. 129 (S.C.), held that “Assessee having bona fide belief that he is not liable to pay any Service Tax in relation to seconded employees, Revenue having discharged later two show cause notices – Extended period of limitation not invokable in absence of any “wilful suppression” of facts, or deliberate misstatement.”
   • CBIC Instruction: C.B.I&C, vide its instruction No. 5/2023-GST dated 13-12-2023 [2023 (79) G.S.T.L. C9] (clarified in light of the Hon’ble Supreme Court judgment in the case of Northern Operating Systems Private Limited (NOS). The said instruction is reproduced as under:
   • “Attention is invited to the Hon’ble Supreme Court’s judgment dated 19.5.2022 in the case of CC, CE & ST, Bangalore (Adj.) etc. v. Northern Operating Systems Private Limited (NOS) in Civil Appeal No. 2289-2293 of 2021 on the issue of nature of secondment of employees by overseas entities to Indian firms and its Service Tax implications. Representations have been received in the Board that, subsequent to the aforesaid judgment, many field formations have initiated proceedings for the alleged evasion of GST on the issue of secondment under section 74(1) of the Central Goods and Services Tax Act, 2017 (hereinafter referred to as the ‘CGST Act’).
   • From the perusal of wording of section 74(1) of CGST Act, it is evident that section 74(1) can be invoked only in cases where there is a fraud or wilful mis- statement or suppression of facts to evade tax on the part of the said taxpayer. Section 74(1) cannot be invoked merely on account of non-payment of GST, without specific element of fraud or wilful mis-statement or suppression of facts to evade tax.
   • Therefore, only in the cases where the investigation indicates that there is material evidence of fraud or wilful misstatement or suppression of fact to evade tax on the part of the taxpayer, provisions of section 74(1) of CGST Act may be invoked for issuance of show cause notice, and such evidence should also be made a part of the show cause notice.”
3. No provision to amend GSTR-3B return:
   • GSTR-3B is the important return U/s 39 of the Act, which reflects business transaction of tax payment, inward movement of taxable goods or services and availment of ITC. But GSTN fails to provide mechanism for amendment / revision of GSTR-5B return in case of error of data furnishing by a registered person.
   • The Supreme Court in the case of Central Board of Indirect Taxes and Customs vs. Aberdare Technologies Pvt.Ltd, reported in (2025) 29 Centax 10 (S.C.), held that “The petitioner, Central Board of Indirect Taxes and Customs, must re-examine the provisions/timelines fixed for correcting the bonafide errors. Time lines should be realist as lapse/defect invariably is realized when input tax credit is denied to the purchaser when benefit of tax paid is denied. Purchaser is not at fault, having paid the tax amount. He suffers because he is denied benefit of tax paid by him. Consequently, he has to make double payment. Human errors and mistakes are normal, and errors are also made by the Revenue. Right to correct mistakes in the nature of clerical or arithmetical error is a right that flows from right to do business and should not be denied unless there is a good justification and reason to deny benefit of correction. Software limitation itself cannot be a good justification, as software are meant ease compliance and can be configured. Therefore, we exercise our discretion and dismiss the special leave petition.”
   • Therefore, the Government, may take action to issue necessary instruction to the GSTN to consider this accept and bring changes in software for amendment of GSTR-3B returns or issue instruction to the field formations to accept manually corrected GSTR-3B returns and enable to purchaser to avail ITC.
4. No alert messages from GST portal: In case of service of intimation, notice and order by the tax authority by uploading on common portal but taxpayers are not getting alert messages on registered mobile. Consequently, the taxpayers in dark position to get information from the portal in time to present his submissions before the tax authorities. In absence of any replies from the taxpayers the tax authorities used to confirm demand and take recovery action like bank attachment. It is high time for the Government should issue instruction to the field formation that apart from uploading intimation, show cause notice, demand order on common portal, they should additionally sent all these documents by registered / speed post with due acknowledgement. There is also need of mapping of activities U/s 169 of the Act with common portal so that unnecessary litigation can be avoided.
5. No Specific column in GSTR-3B for claiming of previous period left out ITC: It is observed that there is no specific column in GSTR-3B return for furnishing details of ITC for the previous year left out ITC for claiming by the taxpayers in the current period. Due to non-availability of specific column in GSTR-3B return the taxpayers are facing difficulty to avail ITC for the previous period. It is suggested that a specific column must be introduced in GTSR-3B return for claiming of left out ITC for the previous period so as to reduce the litigation and compliances arising out of ITC mismatch in current period. This issue should be taken up with GSTN.
6. Revocation of GST registration and filing of GSTR-1 returns after 3 years:
   • The Finance Act, 2023 has brought an amendment in Section 37 (5) of the CGST Act,2017 and notified vide Notification No. 28/2023-Central Tax, dated 31^st July,2023, wherein made effective from 1^st August,2023, specified that “a registered person shall not be allowed to furnish the details of outward supplies under sub-section (1) for a tax period after the expiry of a period of three years from the due date of furnishing the said details:
   • Provided that the Government may, on the recommendations of the Council, by notification, subject to such conditions and restrictions as may be specified therein, allow a registered person or a class of registered persons to furnish the details of outward supplies for a tax period under sub-section (1), even after the expiry of the said period of three years from the due date of furnishing the said details.”
   • It is observed that no such notification has not been issued by the Government to regularised the provision of section 37 (5) of the CGST Act, 2017 and allow the registered person to file GSTR-1 returns after expiry of three years. So the Government should take up matter with the GST Council for recommendation at the earliest. The filed formation of revenue department are raising objection to allow revocation of GST registration and filing of returns after expiry of three years on the ground of unbarring returns. Due to the same registered person are facing difficulties to continue their business in absence of such non-issuance of notification to file returns after expiry of three years as per amended in Section 37(5) of the CGST Act,2017 read with proviso to the said Act.
7. Non-issuance of FORM GST DRC-04: It is observed that whenever the taxpayers’ are voluntarily paying tax liability under FORM GST DRC-03 but the proper officer fails to issue an acknowledgement of such payment in FORM GST DRC-04. It is suggested that the filed formations / the proper officers of CGST /SGST should be instructed to follow Rule 142(2) of the CGST/OGST Rules, 2017. Alternatively, GSTN should be mapped with GST Rules so that whenever there is voluntary payment made by taxpayers through FORM GST DRC-03, the system should generate FORM GST DRC-04 as an acknowledgement on the portal itself for the payment made by the taxpayers.
8. Service of Notice or Order by registered / speed post: There are six modes of communication to serve order, notice and summon u/s 169 of the Act. But the revenue authority invariably uploading on common portal and thinking that uploaded on portal means served to the taxpayers. For which registered persons missing the timeline for SCN reply or filing appeal before the first Appellate authority. It is not possible for small taxpayers to login into the portal every day to search for the notices/ orders. Thereby resulting unwarranted litigations between the taxpayers and department. It is, therefore, highly desired that a convenient and effective mechanism of service of notices and orders should be put in place. Notices and orders also be served through registered post or speed post in addition to uploading on common portal so that the registered person may get information timely, and accordingly can make the require compliances.  It is suggested that like State of Haryana, has issued instruction by the SGST authority of State of Haryana for serving Notices or Orders through registered or speed post with acknowledgement due may be adopted by the Government across the country.
9. Power of Condonation  delay with GSTAT: Section 112 (1) of CGST Act, 2017 provides for three months for time limit for  filing Appeal before the GSTAT plus three months time period for condonation of delay for filing Appeal before GSTAT. In comparison to CESTAT, wherein Tribunal has the ample power to condone delay for filing Appeal on reasonable cases of Order passed by the first Appellate Authority or Commissioner(Appeals). The Section 112(1) may be amended accordingly to empower GSTAT to condone delay more than as prescribed only three months plus three months.
10. Burning Litigations in GST regime:
    • Since past nine years in the GST regime there are very peculiar litigations are arises due to stringent statutory provisions and litigations relating to availment of ITC are pending before the various High Courts and Supreme Court for final decisions or to bring an end to the various  litigations, which are summarised as under:
    • Litigation relating to Section 16(2) (c): The burning litigation of ITC availment relating to section 16(2) (c) of the Act. The purchaser procure goods and made payment to the supplier including tax element. The supplier failed to pay tax and filed returns. But the statutory provision prescribed that the responsibility of the purchaser to ensure payment made by the supplier. The litigation between taxpayers and revenue authority who is responsible if supplier failed to make payment of tax, the revenue authority is initiating recovery action against the purchase due to non-compliance of the section 16(2) (c ). The purchaser contention is that as per section 76 (2) of the Act, the department should take recovery action against Supplier. Section 76(2)  prescribed that tax collected but not paid to the Government, the proper officer has to issue show cause notice to the supplier, who is defaulter of tax but not against purchaser. Thus litigation has reached to Hon’ble Supreme Court for final decisions.
    • Single Show Cause Notice / Order for multiple Financial Years: Issuance of single Show Cause notice for multiple financial is also being challenged before the various High Courts as each financial year having the time limit for issue show cause notice or order so clubbing of more than one financial year is beyond the scope of the provisions under GST law.
    • Issuance of Show Cause Notice beyond time limit: By virtue of section 168A of the CGST Act, 2017, empower the Government to issue Notifications 9/2023 and 56 /2023 has extended time limit for issuance of Show Cause Notice under section 73 for the financial year 2017-2018, 2018-2019 and 2019-2020 and the said Notifications are being challenged before the High Court in absence of Force Majeure and GST Council recommendations to issue such extension notifications were issued by the Government.

Conclusions: The Government in the past 9 years has brought several changes and transformations in the GST regime for simplifications of GST procedures with objective of easy of doing business and economic growth of the Nation. It is high time the Government has to take further improvement in the GST system to fulfill the desire of the taxpayers to achieve the slogan make in India and move towards close to one Nation, one Tax and one Market.