The Government of India has launched a nationwide GST outreach campaign, instructing CBIC field formations to identify and onboard unregistered businesses across sectors.
Sources in the Ministry of Finance have confirmed that the CBIC has been directed to conduct focused interventions in cash-intensive markets and commercial zones, aiming to bring food vendors, service providers, small retailers and other informal players under the GST regime.
"The government's objective is two-fold: bring unregistered businesses into the tax net and reduce the reliance on cash-based, unaccounted transactions," a senior official stated.
Strategic Move Amid Record GST Collections
The drive comes on the heels of record-breaking GST collections in April 2025, which hit Rs 2.36 lakh crore - a 12.6% year-on-year increase. Over 2.5 million new GST registrations were added in FY25, pushing India's total GST-registered taxpayer base to 15 million.
States like Uttar Pradesh, Maharashtra, Gujarat, Karnataka and Tamil Nadu now boast over 1 million GST-registered entities each. Maharashtra leads in terms of absolute collections, while Uttar Pradesh ranks highest by number of registrations.
Outreach, Not Enforcement
Officials have clarified that the initiative focuses on education, trust-building and voluntary compliance rather than coercive enforcement.
"More registrations mean more oversight, but also better compliance, smoother trade, and potentially lower rates for all in the future," said a senior source, highlighting the long-term goal of rate rationalisation through base expansion.
The campaign includes market intelligence, data analytics and door-to-door engagement strategies to identify untapped taxpayer potential.
Structural Reforms for Long-Term Gains
India's informal sector still accounts for an estimated 45-50% of total employment and contributes significantly to GDP, but without proportionate tax contribution. Experts believe that formalising this segment is essential for boosting productivity, extending social security, and improving access to finance.
"Formalisation of the informal economy is critical not just for tax collection, but for sustainable growth. GST's digital trail can revolutionise policymaking and compliance monitoring," an official added.
Additionally, a wider tax base helps reduce the individual tax burden and can support future rationalisation of GST rates - a long-standing demand from businesses and tax experts.
Road Ahead
With India positioning itself as a global investment destination, the shift toward a formalised economy could bolster its ease of doing business rankings, attract higher FDI inflows and instill confidence among global investors.
Although the Ministry of Finance has yet to officially respond to media queries, the ongoing campaign signals a clear policy push: formalisation via GST registration is no longer optional - it's the new normal.
CAclubindia
