GST revenue momentum: Collections rise 4.6% to Rs 1.96 lakh crore in October; festive demand offsets impact of rate cuts

India’s gross Goods and Services Tax (GST) collections rose 4.6% year-on-year to about Rs 1.96 lakh crore in October, driven by festive demand and pent-up consumption, according to government data released on Saturday.The increase came despite GST rate cuts on 375 items–from kitchen essentials to electronics and automobiles–that took effect from September 22, coinciding with the start of Navratri, a key festive period for consumer spending, PTI reported.The October collections reflected the impact of strong festive season sales, as many consumers had postponed purchases ahead of the widely anticipated rate cuts. Prime Minister Narendra Modi had announced during his Independence Day speech that GST rates would be reduced before Diwali, with the cuts taking effect at the onset of Navratri.Gross GST mop-up for October stood at Rs 1.96 lakh crore, compared with Rs 1.87 lakh crore in October 2024. In contrast, August and September this year saw collections of Rs 1.86 lakh crore and Rs 1.89 lakh crore, respectively.The 4.6% year-on-year growth in October, however, was lower than the 9% average growth recorded in earlier months. Domestic revenue, an indicator of local sales, rose 2% to Rs 1.45 lakh crore, while GST from imports surged 13% to Rs 50,884 crore.GST refunds increased sharply by 39.6% to Rs 26,934 crore year-on-year, while net GST revenue stood at Rs 1.69 lakh crore in October 2025, marking a modest 0.2% annual rise.Abhishek Jain, Indirect Tax Head & Partner, KPMG says “The higher gross GST collections reflect a strong festive season, higher demand and a rate structure that has been well absorbed by businesses. It is a positive indicator of how both consumption and compliance are moving in the right direction.”Saurabh Agarwal, Tax Partner, EY India 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.““Crucially, the government’s unwavering commitment to resolve working capital issues for exporters and address concerns around the inverted duty structure is a significant positive development. This certainty in the tax regime and reduction of working capital leakages are vital confidence boosters for the investor community, reinforcing the ease of doing business.” he added. “Furthermore, the impressive, high percentage growth in collections from state/ UTs like Arunachal Pradesh, Nagaland, Lakshadweep, and Ladakh is a tangible indicator of holistic economic development and deepening formalisation across India. This broad-based growth signals a stronger, more integrated national economy and affirms the systemic success of the GST framework.” Agarwal said.