India Launches a New GST Drive to Increase Tax Collections

As per CNBC-TV18 news reports, the Government of India has launched a countrywide campaign to bring more informal businesses under the GST system. This is expected to curb tax evasion and expand the tax base for the Indian government.  

GST Drive To Focus on Cash-Based Businesses

The new campaign will target sectors and areas where cash transactions are common and tax compliance is low. These include:

• Street food vendors and popular eateries
• Small retailers
• Local service providers
• Busy commercial hubs and marketplaces 

With this measure, the government aims to reduce the economy’s dependence on unaccounted cash dealings and bring more transparency to the system.

Read more on: India Targets Global Digital Firms for GST Compliance. 

Focus on Building More Trust Through the GST Drive

As per CNBC-TV18 news reports, the Ministry of Finance has instructed the Central Board of Indirect Taxes and Customs (CBIC) to activate field officers for this mission. However, the move will not be harsh or intrusive. Instead, the campaign will focus on building trust and improving communication with small businesses.

A larger tax base means that each taxpayer contributes a smaller share, which could allow the government to reduce rates gradually.

Record GST Collections and New Taxpayers

India collected a record ₹2.36 lakh crore in GST in April 2025, marking a 12.6% growth from last year. This was driven by:

• Over 2.5 million new GST registrations in FY25
• Continued strength in consumption and production
• Strong compliance by new and existing taxpayers

With this, the total number of GST-registered businesses has reached 15 million.

Top Performing States

• Uttar Pradesh leads in GST registrations, crossing 1 million.
• Maharashtra tops in overall tax collections due to its strong industrial and services base.
• Gujarat, Karnataka, and Tamil Nadu each have over 1 million GST-registered entities.

Conclusion 

India’s economy still has a large informal sector, employing nearly half of the workforce. Experts say formalising this segment will not only boost tax revenue but also help small businesses get access to credit, insurance, and social security.

A broader GST base also supports better policy planning, attracts foreign investment, and improves the ease of doing business. While the Finance Ministry hasn’t officially commented yet, it’s clear that GST registration is now a key part of India’s growth strategy.

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