I have a weakness for reforms whose most important achievement cannot be photographed. A new expressway supplies drones, ribbon-cutting and a pleasingly long list of kilometres. Tax administration supplies forms, refund clocks and arguments over whether an officer may ask a small trader for one more document. Yet the latter can determine whether thousands of businesses spend their working capital on production or lend it involuntarily to the state. That is why I consider the 57th GST Council meeting more consequential than its modest television treatment suggested. According to the Council’s published recommendations, the proposed changes include simpler registration, faster refunds, wider input-tax-credit eligibility, common standards for notices, a higher prosecution threshold and removal of GST arrest provisions. None will look heroic on a campaign poster. Together, they acknowledge that a good tax is not merely one with sensible rates; it is one that an honest firm can comply with without hiring a minor court.
I supported GST when it arrived, but support did not oblige me to pretend its first version was elegant. India attempted the integration of a subcontinent-sized indirect-tax market while carrying forward decades of exemptions, state bargains and bureaucratic suspicion. The original rate structure was too busy, return filing was temperamental, classification disputes became a cottage industry, and refunds could turn exporters into unwilling financiers of government. The honest pro-reform position was never that GST sprang perfect from North Block. It was that one national system was a better foundation than the pre-2017 maze, and that the foundation had to be improved. The government’s critics often collapse those two propositions because admitting the second without denying the first would deprive them of a favourite morality play.
The reform after the reform
The rate rationalisation that took effect in September 2025 was the visible half of GST’s second act. The government’s nine-year review of GST describes a system centred on the 5 and 18 per cent slabs, with a special rate for selected luxury and demerit goods. I welcomed that simplification because four principal slabs had created too many borders inside a tax advertised as borderless. But rates are only the shop window. A proprietor cares just as intensely about registration, notices, blocked credit and the month in which a refund actually enters the bank. The 57th Council’s emphasis on process therefore looks to me like institutional maturity: government first simplified what was charged, then turned to how the charge is administered.
Consider the proposal to standardise the documents sought during registration. It sounds microscopic until one remembers how discretion operates. A rule may list a reasonable set of proofs, but an uncertain applicant can still face serial demands produced by local habit. Every extra round adds delay and, more corrosively, teaches the citizen that outcomes depend on satisfying an individual rather than meeting a rule. Drop-down fields and prescribed document lists will not abolish bureaucratic imagination, but they narrow its stage. Automatic registration for lower-risk applicants points in the same direction. I want the tax department to concentrate human scrutiny where data indicates risk, not distribute inconvenience democratically so that every applicant receives an equal portion.
The proposed change to criminal provisions is even more welcome. Tax evasion should be punished, and organised invoice fraud is not a philosophical disagreement with the finance ministry. But an administration that reaches too quickly for arrest or prosecution makes commercial errors resemble crimes. Raising the prosecution threshold and removing arrest provisions under GST would mark a needed move from theatrical toughness toward proportionate enforcement. A confident state can distinguish a genuine fraudster from a firm disputing classification or credit. Indeed, targeting everyone harshly is not strength; it is an admission that the system cannot tell them apart.
Congress misses the tax system it never had to defend
Congress criticism of GST suffers from a peculiar amnesia. Its leaders speak as though India previously possessed a calm, low-compliance paradise disrupted by Narendra Modi. The old order included central excise, service tax, state VAT, entry taxes, cascading burdens and border check-post friction. Congress did pursue a GST, and it deserves acknowledgement for contributing to the intellectual and legislative journey. What it cannot plausibly do is claim parentage when the reform is praised and complete estrangement when implementation is difficult. That is not policy analysis; it is a family dispute over inheritance.
The more sophisticated objection is that the Union has used GST to centralise fiscal power and that states surrendered valuable flexibility. This concern should not be dismissed. States require predictable revenues, the Council must remain a forum of genuine negotiation, and compensation disputes damaged trust. But the answer is better federal bargaining inside the common market, not a return to fragmented taxation. The Council’s record of negotiated decisions is itself an institutional asset. A country can argue vigorously over rates and still preserve a national base. Federalism does not require every truck to encounter a different tax civilisation when it crosses a state line.
Nor should supporters oversell the latest reforms before they are implemented. A circular promising uniform notices is not the same as a taxpayer receiving one. Faster refunds must be measured by elapsed days and rejected claims, not adjectives in a press release. The optional scheme for smaller consumer-facing businesses needs clear safeguards against becoming another compartment that firms struggle to exit. The government should publish dashboards covering registration time, refund age, appellate pendency and the distribution of enforcement actions. If GST is now mature, it can tolerate sunlight granular enough to be inconvenient.
The political virtue of maintenance
Indian politics habitually rewards announcement and neglects maintenance. We inaugurate institutions more enthusiastically than we repair their plumbing. GST’s iterative reform is valuable partly because it rejects that pattern. The Modi government has not abandoned the tax because its launch produced friction; it has kept changing rates, rules, technology and appellate mechanisms. Critics call this proof that the original design failed. I call it proof that a government is willing to learn, provided the learning does not become an excuse for permanent instability.
Businesses need predictability as much as relief. After this round, the Council should resist frequent tinkering unless evidence makes it necessary. A shopkeeper should not need to follow ministerial briefings as if tracking a Test match. Classification should become boring, forms should remain stable, and legitimate credit should move through the system with the unremarkable reliability of a bank transfer. The final test of a tax reform is that taxpayers stop discussing its interface at dinner.
My verdict, then, is favourable but conditional. Rate rationalisation corrected an overcomplicated structure; the new process agenda attacks the culture of suspicion embedded in administration. The government deserves credit for both, especially when the easier political move would have been to declare victory after lowering rates. Congress is free to identify failures, and it occasionally does so usefully. But nostalgia for the pre-GST jumble is not a programme. The serious contest is now over who can make the national system simpler, fairer and less discretionary. On that field, the government is doing the work while much of the opposition is still composing an obituary for a reform that has plainly entered its second life.
