Introduction
The Goods and Services Tax (GST) framework in India continues to evolve with new amendments aimed at improving compliance and revenue generation. In a major move, the GST Council, in its 55th meeting on December 21, 2024, decided to reconstitute the Group of Ministers (GoM) on GST revenue analysis with an expanded Terms of Reference (ToR). This move is expected to provide greater insights into revenue patterns, state-wise collections, and sector-specific challenges while paving the way for effective enforcement and policy interventions.
Composition of the Reconstituted GoM
The GoM on GST revenue analysis will now be led by Goa Chief Minister Pramod Sawant and comprises members from various states:
- Bihar – Samrat Chaudhary
- Chhattisgarh – O P Choudhary
- Gujarat – Kanubhai Desai
- Andhra Pradesh – P Keshav
- Maharashtra – Ajit Pawar
- Punjab – Harpal Singh Cheema
- Tamil Nadu – Thangam Thennarasu
- Telangana – M B Vikramarka
Expanded Terms of Reference (ToR)
The newly defined ToR highlights the GoM’s broader role in revenue analysis, compliance, and policy recommendations. The following are the key aspects covered under the expanded ToR:
- State-Wise Revenue Collection Trends
- Identification of revenue patterns across various states and regions.
- Reviewing the effectiveness of GST implementation in different states.
- Sectoral Revenue Analysis
- Examining sector-specific tax contributions to identify revenue leakages.
- Proposing policy interventions to improve tax compliance in underperforming sectors.
- Inter-State Outward Supply Revenue Review
- Assessing revenue collections from inter-state transactions.
- Identifying disparities in tax collections due to state-level variations.
- Macroeconomic & Geographical Influences on GST Revenues
- Impact of economic policies and regional factors on GST revenue growth.
- Special focus on agrarian and smaller states facing revenue shortfalls.
- Review of GST Act Amendments & Compliance Tools
- Evaluating recent amendments to GST laws and their effectiveness.
- Harmonising anti-evasion measures, audits, and scrutiny tools across NIC, GSTN, DGARM, and state governments.
- Revenue Augmentation & Policy Corrections
- Recommending necessary course corrections for revenue augmentation.
- Addressing challenges faced by states with high revenue shortfalls.
Significance of the GoM’s Reconstitution
The restructuring of the GoM is crucial at a time when India’s GST collection has shown a 9.4% year-on-year growth from April 2024 to February 2025, reaching ₹20.13 lakh crore.
- After refunds, net collections stand at ₹17.79 lakh crore, reflecting an 8.6% growth.
- The GoM’s recommendations are expected to help further optimise revenue generation, curb tax evasion, and enhance tax compliance across sectors.
Parallel GoMs & Related Policy Decisions
In addition to the GoM on GST revenue analysis, the GST Council has constituted two other key GoMs:
- GoM on GST Rate Rationalisation
- Led by Bihar Deputy CM Samrat Chaudhary.
- Tasked with reviewing and streamlining GST slabs and tax rates.
- GoM on Compensation Cess Replacement
- Led by Minister of State for Finance Pankaj Chaudhary.
- Responsible for deciding on the future taxation framework after the compensation cess ends on March 31, 2026.
Implications for Businesses & Taxpayers
The reconstitution of the GoM on GST revenue analysis signals increased scrutiny and policy shifts that businesses and taxpayers should be aware of:
✅ Improved Compliance Measures: Businesses must ensure adherence to GST audits, e-invoicing, and scrutiny protocols.
✅ Sectoral Policy Changes: Industry-specific tax reliefs or rate adjustments may arise based on the GoM’s findings.
✅ Focus on High Revenue Shortfall States: Businesses operating in agrarian or smaller states may face new compliance norms or government interventions.
✅ Better Taxpayer Services: Efforts to unify audit and enforcement platforms will likely result in simpler tax compliance procedures for businesses.
Final Thoughts
The GST Council’s move to restructure the GoM on revenue analysis reflects the government’s focus on optimising tax collection, curbing tax evasion, and ensuring uniform compliance. As businesses and professionals navigate these changes, staying updated on sector-wise tax policies and compliance frameworks will be critical.