Has the GST rate revision led to a rise in state revenue by 5%?
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Synopsis
The recent adjustment in GST rates has sparked a notable 5% increase in state revenues, according to the Minister of State for Finance. This increase, effective from September 22, is part of a larger economic reform strategy aimed at enhancing consumption and business ease. Discover how this change could reshape financial dynamics.
Key Takeaways
- GST rate revision: Effective from September 22, 2025.
- 5% revenue growth: Notable increase in state revenue.
- GST Council: Recommendations play a vital role in tax structure.
- Economic reforms: Part of a broader strategy to enhance consumption.
- Stationery items: GST rate reduced to nil.
New Delhi, Dec 16 (NationPress) The adjustment of GST rates that came into effect on September 22, as part of the government's economic reforms, has led to a 5 percent increase in state revenues (Gross SGST + IGST allocated to States) from September to November this financial year, compared to the same period last year, as reported to Parliament on Tuesday.
In a written response during a Rajya Sabha session, Minister of State for Finance, Pankaj Chaudhary, highlighted that GST collections from September to November in the current financial year (2025-26) have surged to Rs 2,59,202 crore, up from Rs 2,46,197 crore during the corresponding period of 2024-25.
The minister also emphasized that GST rates are determined based on the recommendations of the GST Council, a constitutional body comprising members from the states, Union Territories, and the Central government. The 56th GST Council meeting held on September 3, 2025, recommended a comprehensive rationalization and structural simplification of the tax system. These recommendations were officially enacted by the Central government from September 22, 2025.
The recent rationalization of GST rates, coupled with the government's ongoing focus on improving the ease of doing business, is part of a broader strategy to stimulate consumption growth within the economy. An increase in consumption demand is anticipated to positively influence GST revenues. The new GST rates have only been in effect since September 22, 2025, and Gross GST collections, excluding Compensation Cess, recorded a 4.2 percent year-on-year growth from October to November 2025.
The minister explained that the revenue from cesses and surcharges contributes to the Consolidated Fund of India and is utilized for financing development and welfare initiatives in states through various Central government programs.
In response to another inquiry, the minister disclosed that the GST rate for stationery items such as pencils, pencil sharpeners, erasers, exercise books, graph books, laboratory notebooks, and notebooks has been reduced to nil.
Point of View
It's crucial to recognize the implications of the recent GST rate revision. This initiative aligns with the government's ongoing efforts to stimulate economic growth and improve state revenues. While the increase in revenue is promising, we must also monitor the long-term effects on consumption and business dynamics to ensure sustainable economic health.
NationPress
21/12/2025
Frequently Asked Questions
What is the impact of the GST rate revision on state revenues?
The GST rate revision has led to a 5% increase in state revenues during the period from September to November 2025 compared to the previous year.
When did the new GST rates come into effect?
The new GST rates became effective on September 22, 2025.
Who recommends the GST rates?
The GST rates are prescribed based on the recommendations of the GST Council, which includes representatives from states, UTs, and the Centre.
What is the significance of the GST Council's 56th meeting?
The 56th GST Council meeting recommended comprehensive rate rationalization and structural simplification of the tax system, which was enacted on September 22, 2025.
What changes were made regarding stationery items?
The GST rate for stationery items, including pencils and notebooks, has been reduced to nil.
