How Did India’s GST Collection Increase By 6.1% to Exceed Rs 1.74 Lakh Crore in December?
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Synopsis
India's GST collection continues to impress, rising 6.1% to Rs 1.74 lakh crore in December 2025, indicating robust economic activity. This increase comes despite tax rate cuts, showcasing a resilient consumer demand. With upcoming changes in tobacco taxation, this article explores the implications for India’s economy and GST regime.
Key Takeaways
- GST collection in December 2025 reached Rs 1,74,550 crore.
- 6.1% growth compared to December 2024.
- Central GST collections totaled Rs 34,289 crore.
- Upcoming changes in tobacco tax regime effective February 1, 2026.
- GST refunds in December 2025 were Rs 28,980 crore.
New Delhi, Jan 1 (NationPress) India’s Goods and Services Tax (GST) collection witnessed a remarkable rise of 6.1 per cent, reaching Rs 1,74,550 crore in December 2025. This marks an increase from Rs 1,64,556 crore during the same month in the previous year, showcasing the growth in economic activities, as per the official data released on Thursday.
The breakdown of the collections shows that Central GST collections amounted to Rs 34,289 crore, state GST collections totaled Rs 41,368 crore, and integrated GST collections reached Rs 98,894 crore.
The government also garnered Rs 4,551 crore through the GST compensation cess, which remains in place as a temporary measure until all loan and interest obligations are resolved. The total collection for the year stood at Rs 88,385 crore, a decline from Rs 1.1 lakh crore in 2024.
Despite the introduction of new higher GST slabs, such as 40 per cent for luxury items, the cess on tobacco and pan masala continues.
In December, total GST refunds reached Rs 28,980 crore, compared to Rs 22,138 crore in the same month last year.
The growth in GST collection persists even after a reduction in tax rates that took effect on September 22, which has spurred consumer demand for goods and services, thereby enhancing economic activity.
Additionally, the Finance Ministry announced a series of notifications on Thursday to implement a new tax structure for tobacco products starting February 1, 2026. This includes the enactment of the Central Excise (Amendment) Act, 2025, which specifies new excise duty rates on tobacco.
It was also clarified that under the Goods and Services Tax framework, the excise duty on cigarettes has been nominal, equivalent to a “fraction of a paisa” per stick, and the GST compensation cess rate on tobacco has remained unchanged since its introduction in July 2017.
Point of View
It's clear that the steady increase in GST collection is a positive indicator of India's economic resilience. The government's strategic adjustments and the ongoing reliance on the GST compensation cess illustrate an adaptive approach to fiscal policy. Such developments should be closely monitored as they have significant implications for both consumers and businesses in the nation.
NationPress
04/01/2026
Frequently Asked Questions
What is the GST collection for December 2025?
India's GST collection for December 2025 was Rs 1,74,550 crore, reflecting a 6.1% increase from the previous year.
What are the components of GST collection?
The GST collection consists of Central GST, State GST, and Integrated GST, amounting to Rs 34,289 crore, Rs 41,368 crore, and Rs 98,894 crore, respectively.
What changes are being made to tobacco taxation?
A new tax regime for tobacco products will be implemented from February 1, 2026, including new excise duty rates as per the Central Excise (Amendment) Act, 2025.
How did GST collections perform despite tax cuts?
GST collections grew despite tax cuts due to increased consumer demand for goods and services, which stimulated economic activity.
What was the total GST refunds in December 2025?
In December 2025, total GST refunds amounted to Rs 28,980 crore, an increase compared to Rs 22,138 crore in the previous year.
