India’s GST Collections Climb 4.6% to ₹1.96 Lakh Crore in October, Defying Rate Cuts Amid Festive Surge
Strong Consumer Spending and Import Growth Offset Tax Reductions; Net Revenue Edges Up 0.6% to ₹1.69 Lakh Crore
India’s Goods and Services Tax (GST) collections demonstrated resilience in October 2025, rising 4.6% year-on-year to approximately ₹1.96 lakh crore, despite recent rate reductions on 375 items announced by the GST Council. The data, released by the Ministry of Finance on November 1, 2025, highlights the robust festive season demand that propelled gross revenues, marking the 10th consecutive month above ₹1.8 lakh crore. This growth, though below the fiscal’s average of 9%, underscores the economy’s consumption-driven momentum, with imports contributing significantly to the uptick.
Breakdown of Collections: Imports Shine, Domestic Steady
The October figures reflect a mixed performance across components. Gross domestic GST revenue grew a modest 2% to ₹1.45 lakh crore, indicating stable local consumption but limited acceleration post-rate cuts. In contrast, GST from imports surged 13% to ₹50,884 crore, buoyed by heightened imports of electronics, automobiles, and festive goods.
Component-wise, Central GST (CGST) stood at ₹36,547 crore, State GST (SGST) at ₹37,210 crore, Integrated GST (IGST) at ₹1,06,443 crore, and Cess at ₹7,812 crore. After adjusting for refunds, which jumped 39.6% to ₹26,934 crore driven by inverted duty structures in sectors like packaging and pharmaceuticals net GST revenue reached ₹1.69 lakh crore, a slight 0.6% increase from October 2024.
Impact of Rate Cuts: Festive Demand Balances the Equation
The GST Council’s September 22, 2025, reforms simplifying the four-tier structure (5%, 12%, 18%, 28%) into two primary slabs (5% and 18%) aimed to boost affordability and consumption. Despite these cuts on essentials like kitchenware, electronics, and autos, October’s collections held firm, largely due to pent-up demand during Navratri and Diwali preparations. Consumers deferred purchases in anticipation of lower rates, leading to a post-cut spending spree.
Experts note that while gross growth slowed from September’s 9.1% (₹1.89 lakh crore), the festive boost mitigated revenue dips. Pratik Jain of PwC LLP observed, “The higher gross collections reflect strong festive demand, with rate cuts absorbed well by businesses.” However, elevated refunds expected to rise further in November due to 90% processing within seven days under new norms could pressure net figures.
Fiscal Year Performance: Steady Momentum
For April-October 2025-26, cumulative GST collections reached ₹13.89 lakh crore, up 9% from ₹12.74 lakh crore in the same period last year. This marks the second quarter’s total at ₹5.71 lakh crore, a 7.7% rise. States like Karnataka and Telangana showed 10% growth, while Nagaland and Arunachal Pradesh led with 46% and 44% increases, respectively.
The collections affirm the health of business activity, with Amit Maheshwari of AKM Global noting, “People are spending, and the economy remains robust.” Vivek Jalan of Tax Connect added that the 0.6% net growth balances consumption boosts against rate cut impacts.
Outlook: November Surge Expected
Analysts anticipate a rebound in November, with full-month effects of rate cuts and sustained festive spending pushing collections higher. Karthik Mani of BDO India predicts increased affordability will drive demand, while Abhishek Jain of KPMG highlights the reforms’ role in curbing evasion and simplifying compliance.
In tandem with net direct tax revenues up 6.33% to ₹11.89 lakh crore (till October 12), these figures signal fiscal strength, enabling bolder GST 2.0 reforms.
Conclusion
October’s GST collections, despite rate cuts, paint a picture of economic vitality fueled by festive fervor. The 4.6% gross rise to ₹1.96 lakh crore, with net at ₹1.69 lakh crore, demonstrates the system’s adaptability. As India advances toward a seamless tax ecosystem, sustained consumption and policy tweaks will be key to maintaining this trajectory. Investors and policymakers alike can view this as a green light for growth in the world’s fastest-expanding major economy.
