GST Income Rises Despite GST Cuts

Picture Credit: by IBTimes India

India’s Goods and Services Tax (GST) collections rose 4.6% year-on-year to about ₹1.96 lakh crore in October 2025, driven largely by festive season demand and a surge in consumer spending. The uptick came despite a major reduction in GST rates on 375 items, ranging from kitchen staples to automobiles and electronics, that took effect from September 22, coinciding with the start of Navratri.

The festive period, which traditionally fuels retail and automobile purchases, was further energized this year as consumers deferred buying decisions in anticipation of rate cuts. Prime Minister Narendra Modi had announced during his Independence Day address that GST rates would be reduced ahead of Diwali, prompting many households to wait for the new rates before making big-ticket purchases.

According to data released by the Finance Ministry on Saturday, October’s gross GST collection of ₹1.96 lakh crore was higher than the ₹1.87 lakh crore collected in the same month last year. Collections in August and September had been relatively muted at ₹1.86 lakh crore and ₹1.89 lakh crore, respectively, suggesting that the festive buying spree provided a strong recovery boost.

Picture Credit: by The Statesman

While overall growth in GST receipts moderated to 4.6%, below the 9% average growth seen in previous months, import-related revenues rose sharply. GST from imports jumped 13% to ₹50,884 crore, reflecting stronger external trade activity, while domestic revenue grew 2% to ₹1.45 lakh crore, indicating steady local consumption.

Refunds, however, increased significantly by 39.6% year-on-year to ₹26,934 crore, which brought the net GST revenue for October down to ₹1.69 lakh crore, marking a marginal 0.2% annual growth.

Despite the moderation in growth rate, analysts see the October data as a positive sign, suggesting that lower tax rates and festive demand together helped sustain India’s consumption momentum.