GST collections up 4.6% in October to ₹1.96 lakh crore despite recent rate cuts

India’s gross GST collections rose by 4.6 % year-on-year in October 2025, reaching about ₹1.96 lakh crore, according to data released by the government.  The figure marks the 10th consecutive month that GST receipts have remained above the ₹1.8 lakh crore mark.

The increase comes in the wake of the government’s structural GST reform which took effect on 22 September 2025, a sweeping rationalisation of slab rates aimed at simplifying the indirect tax regime. Under the new structure, many items were moved to lower tax slabs (5% and 18%) from earlier mid-levels.

Despite the lower tax incidence, the modest growth in collections suggests that demand held up, aided by a strong festive season. The government and analysts point to higher domestic consumption and improved compliance as key drivers. Experts note that the higher gross GST collections reflect a strong festive season, higher demand and a rate structure that has been well absorbed by businesses.

However, the growth rate is the slowest in recent months, and materially lower than the double-digit hikes seen earlier this fiscal. For instance, September had seen about 9.1 % growth in gross GST collections. Net GST collections (after refunds) rose by only about 0.6–0.2 % to around ₹1.69 lakh crore. 

The data offers a mixed signal. On one hand, the tax base appears resilient, even after rate cuts; on the other, the subdued growth suggests caution as the impact of the new regime and festive pull-forward may fade in coming months. The government has expressed confidence that any shortfall in revenues from the reforms will be manageable and that fiscal targets remain broadly on track.

Source: Economic Times