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Informist, Saturday, Nov. 1, 2025

 

NEW DELHI – India's goods and services tax collections grew 4.6% on year to INR 1.959 trillion in October, data released by the government Saturday showed. This was the slowest pace of on-year growth since June 2021, when the GST mop-up rose only 2.1% as movement restrictions were re-introduced due to the COVID-19 pandemic.

This is the first full-month data after the government overhauled its indirect tax regime by collapsing four slabs of 5%, 12%, 18%, and 28% into two slabs of 5% and 18?fective Sept. 22. The sluggish pace comes despite the festival season and its related consumption arriving two weeks earlier than in 2024 and entirely in October this year.

 

Still, GST collections were up 3.7% from September. In October last year, GST collections had grown at an annual pace of 8.9%.

 

"The higher gross GST collections reflect a strong festive season, higher demand and a rate structure that has been well absorbed by businesses," Abhishek Jain, indirect tax head and partner at KPMG, said. "It is a positive indicator of how both consumption and compliance are moving in the right direction."

Cumulatively, GST collections in the first seven months of 2025-26 (Apr-Mar) grew 9.0% on year to INR 13.894 trillion, trailing the 10.9% growth projected in the Budget for the current fiscal year. The changes to the GST regime are expected to have a net revenue impact of around INR 480 billion annually. The GST Council segmented the two broad GST slabs on the tenets of 'merit' and 'standard', putting a majority of common-use items in the 5% slab, thereby bringing down the effective average GST rate. A host of white goods, especially consumer durables like washing machines and big televisions, were moved to the 18% slab from 28%, thereby lowering the average GST rate.

 

Central GST collection in October was INR 365.47 billion, State GST collection was INR 451.34 billion, Integrated GST mop-up was INR 1.064 trillion, and INR 78.12 billion was from compensation cess. The post-settlement revenues of states rose 8.2% on year to INR 913.57 billion in October.

 

GST revenue, net of refunds, was INR 1.690 trillion in October, up 0.6% on year. Refunds during the month rose sharply, by 39.6% on year, to INR 269.34 billion. In Apr-Oct, refunds grew 24% on year.

 

"...GST 2.0 has also created or deepened an inverted duty structure in many sectors like packaging, farming, pharma, etc. All such taxpayers will apply for inverted duty refunds from November 2025," Vivek Jalan, partner at Tax Connect Advisory Services, said. "As per new norms, 90% of refunds needs to be processed in 7 days and hence Nov'25 and Dec'25 would see an increase in domestic refunds tremendously."

 

Gross domestic GST revenue rose 2.0% on year to INR 1.451 trillion in October, while the import revenue rose to INR 508.84 billion from INR 450.96 billion a year ago.  End

 

Reported by Aaryan Khanna

Edited by Tanima Banerjee

 

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