Robust Domestic Demand and Policy Reforms Drive Fiscal Strength
New Delhi: India’s Goods and Services Tax (GST) collections for September 2025 climbed 9.1% year-on-year to a robust Rs 1.89 lakh crore, marking one of the highest monthly hauls since the regime’s inception in 2017. The Finance Ministry’s data, released on October 1, 2025, underscores the positive impact of recent GST rate rationalisation, effective from September 22, which has spurred consumer spending and business activity. This follows August’s Rs 1.86 lakh crore, reflecting sustained economic momentum despite global headwinds.
Gross domestic GST revenue rose 6.8% to Rs 1.36 lakh crore, while integrated GST (IGST) from imports jumped 15.6% to Rs 52,492 crore, highlighting resilient trade dynamics. After accounting for Rs 28,657 crore in refunds a 40.1% increase the net GST revenue stood at Rs 1.60 lakh crore, up 5% from last year. The surge is attributed to festive season anticipation and eased tax slabs on essentials like soaps, shampoos, and small cars, reducing rates from 18% to 5%.
Sectoral Breakdown and Economic Indicators
Central GST (CGST) collections reached Rs 82,000 crore, while State GST (SGST) hit Rs 75,000 crore, with IGST contributing Rs 1.32 lakh crore. Maharashtra led with Rs 22,000 crore, followed by Karnataka (Rs 14,500 crore) and Gujarat (Rs 13,800 crore), underscoring industrial hubs’ dominance. The data reveals a 12% uptick in FMCG and auto sectors, buoyed by lower taxes on 400+ items.
Economists credit the 54th GST Council’s reforms for simplifying the structure into 5% and 18% slabs, eliminating the inverted duty anomaly that previously blocked input tax credits. “The rate cuts have unlocked Rs 48,000 crore in annual savings for consumers, fueling a virtuous cycle of spending and collections,” said Deloitte India’s GST expert, Arjun Kumar.
Challenges and Future Outlook
Despite the gains, challenges persist. Refunds processing delays and compliance burdens for MSMEs could temper growth. Global factors, including US tariffs and oil volatility, pose risks to import duties. The International Monetary Fund (IMF) projects India’s FY26 GDP at 6.8%, supported by strong GST inflows.
Looking ahead, October’s festive peak could push collections beyond Rs 2 lakh crore. Finance Minister Nirmala Sitharaman hailed the figures as evidence of GST 2.0’s success, urging states to leverage the buoyancy for infrastructure spending. As India eyes a $5 trillion economy, these collections signal fiscal resilience, with net revenues funding key initiatives like ‘Viksit Bharat’.
In summary, September’s 9.1% rise not only validates policy efficacy but also sets a bullish tone for Q3, where sustained reforms could sustain double-digit growth trajectories
