What administrative bottlenecks persist in GST implementation in India? Suggest reforms.

Nearly a decade after the 101st Constitutional Amendment created a unified indirect tax under Article 279A, GST's design has been simplified — the 56th Council collapsed four slabs into 5% and 18% plus a 40% de-merit rate from 22 September 2025 [1] — yet the persisting problems are largely administrative rather than structural.

Persisting bottlenecks

• Registration and cancellation delays: physical verification and manual approvals slow entry for small firms; deregistration remains cumbersome, leaving dormant GSTINs on the rolls.
• Classification disputes: even after rationalisation, borderline goods required successive official clarifications through multiple rounds of FAQs [2], showing interpretation, not rate design, drives litigation.
• Input Tax Credit (ITC) mismatches: credit denial for a buyer due to a supplier's default blocks working capital, especially for MSMEs [3].
• Refund pendency: exporters and inverted-duty-structure units face delayed refunds, locking up cash.
• Capacity and technology gaps: uneven staffing and training across State tax administrations, plus GSTN portal outages at filing deadlines.
• Fake invoicing and evasion: shell entities claiming fraudulent ITC force intrusive enforcement on honest taxpayers.
• Federal coordination: Council decisions are only recommendatory, and long gaps between meetings slow resolution of Centre–State administrative issues.

Suggested reforms

• Risk-based, fully digital registration with Aadhaar authentication and time-bound deemed approval; automated cancellation for non-filers.
• Advance-ruling reform — a National Appellate Authority with uniform, binding rulings to end conflicting State-level interpretations.
• Faster ITC and refunds: system-driven auto-refunds within a fixed timeline for exporters and inverted-duty cases, with grievance escalation.
• Data analytics and AI-based invoice matching to target evaders rather than blanket scrutiny; expand e-invoicing coverage.
• Capacity building: joint Centre–State training academies and a single-window taxpayer facilitation desk.
• Institutionalise the Council: fixed quarterly meetings and a strengthened Secretariat to sustain cooperative federalism.

GST's next dividend will come not from further rate cuts but from process simplification — the same intent behind reforms already easing MSME compliance [3][4]. Predictable, technology-driven and taxpayer-friendly administration, backed by a regularly convened Council, can make GST the seamless "good and simple tax" it was designed to be.