GST Collection Rises 4.6% Despite Rate Cuts; Total Collection at ₹1.96 Lakh Crore in October 2025; Festive Purchasing Drives Growth

Issue: To analyze the revenue performance of the Goods and Services Tax (GST) in October 2025, specifically determining whether the strong consumer spending during the festive season successfully counteracted the expected revenue decline caused by the recent GST rate rationalization (GST 2.0).

Facts:

The government slashed GST rates on 375 items, including automobiles, electronics, and kitchen staples, effective September 22, 2025 (the first day of Navratri).
GST collections in the previous two months (August and September) were slightly subdued.
The October collection reflects the impact of sales made during the festive buying spree.

Decision:

India’s gross GST collection in October 2025 (reflecting September sales) increased by 4.6% year-on-year (YoY), reaching approximately ₹1.96 lakh crore.

Key TakeDowns:

Growth Despite Rate Cut: The 4.6% growth is significant because it occurred despite the immediate and substantial revenue impact of the GST rate cuts, confirming that the policy successfully triggered a robust increase in consumption volume.
Festive Demand Driver: The growth was primarily driven by festive buying and pent-up demand from consumers who had deferred purchases while awaiting the announced GST rate reduction.
Lower Growth Rate: Despite the positive absolute collection, the rate of growth (4.6% YoY) is lower than the approximate 9% average growth seen in previous months, which indicates that the rate cut did, in fact, cause a revenue drag, but one that was largely cushioned by increased sales volume.
Import Contribution: Tax collected from imports surged about 13% to ₹50,884 crore, while gross domestic revenue (local sales) grew only 2%.
Net Revenue: Net GST revenue, after accounting for refunds, stood at ₹1.69 lakh crore, registering a slight 0.2% YoY growth.

Source :- net_revvenue_gst_oct_2025