After rate cuts, GST collections up 4.6% YoY at Rs 1.96 lakh crore in October

In absolute terms, this marked the fourth instance of the GST collections rising over Rs 1.95 lakh crore in the ongoing financial year 2025-26, with a record-high level of Rs 2.37 lakh crore seen in April. The GST revenue collection numbers are expected to improve in November when the full-month impact of the rate cuts would be visible and is expected to have translated into a consumption push. Before the GST rate cuts rolled out during the last nine days of September, consumers had put purchases of major consumer goods and automobiles on hold in anticipation of the rate cuts, which experts pointed out has reflected in the October revenue figures. Data for automobiles sales and offtake of consumer items indicates a pickup post-September 22 GST rate cuts.

On a net basis, GST collections, after accounting for refunds, grew by a meagre 0.6 per cent to Rs 1.69 lakh crore in October as refunds rose sharply by 39.6 per cent to Rs 26,934 crore. While domestic refunds grew 26.5 per cent y-o-y to Rs 13,260 crore in October, refunds for imports were up 55.3 per cent to Rs 13,675 crore.

“…refund disbursements surged nearly 40 per cent y-o-y which is a clear indication of improved compliance discipline and smoother credit flows for business,” said Manoj Mishra, Partner and Tax Controversy Management Leader, Grant Thornton Bharat.

The detailed breakup for gross GST collections showed that the revenue collections grew 2 per cent y-o-y to Rs 1.45 lakh crore in October, while GST from imports rose 12.84 per cent to Rs 50,884 crore.

“The GST collections in October 2025, on domestic transactions, have remained flat, with just 2 per cent growth in collections on a year-on-year basis. This is due to the somewhat muted demand in the first three weeks of September 2025, where some of the discretionary purchases were postponed to the last week of the month or even in the subsequent month, awaiting the reduction in price due to rate cuts. Further, the rate reductions, which became effective in the last week of September 2025, also impacted the overall collections, despite the actual buying likely to have shown an uptick,” Karthik Mani, Partner-Indirect Tax, BDO India said.

Going ahead, the GST collection numbers are expected to pick up with festive spending, experts said. “The GST collections, while aligning with immediate expectations, reflect a muted momentum in September primarily due to rate rationalisation effect in the majority part of September month and the deferred consumer spending ahead of the upcoming festive season. This anticipated lag is likely to be compensated by more robust numbers in the next month, driven by seasonal buoyancy,” Saurabh Agarwal, Tax Partner, EY India, said.

The gross Central GST (CGST) — the tax levied on intra-state supplies of goods and services by the Centre — collections stood at Rs 36,547 crore, and state GST (SGST) — the tax levied on intra-state supplies of goods and services by the states — collections were Rs 45,134 crore, while Integrated GST (IGST) — the tax levied on all inter-state supplies of goods and services — collections stood at Rs 1.06 lakh crore. Cess collection stood at Rs 7,812 crore, down 38 per cent as the levy was removed from automobiles and other items under GST 2.0 and retained only for tobacco and tobacco-related items.