How Did GST Collections Increase by 4.6% to Rs 1.96 Lakh Crore in October Despite Rate Cuts?
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Synopsis
Discover how the Goods and Services Tax (GST) collections have defied expectations, rising 4.6% to Rs 1.96 lakh crore in October. This growth occurs despite rate adjustments, showcasing strong consumer demand during the festive season. Learn more about the implications of these numbers on India's economy and consumption trends.
Key Takeaways
- The GST collections for October stood at Rs 1.96 lakh crore.
- There was a 4.6% year-on-year increase.
- GST collections have exceeded Rs 1.8 lakh crore for ten consecutive months.
- Consumer demand surged following September rate cuts.
- Predictions suggest consumption could rise by over 10% this year.
New Delhi, Nov 1 (NationPress) In the festive month of October, the Goods and Services Tax (GST) collections experienced a remarkable rise of 4.6% year-on-year, totaling approximately Rs 1.96 lakh crore, as per official data released on Saturday.
This marks the 10th consecutive month that revenues have exceeded the Rs 1.8 lakh crore threshold.
The government's figures indicate that GST collections surged by 9 percent to around Rs 13.89 lakh crore during the April-October period of FY26, compared to Rs 12.74 lakh crore in the corresponding timeframe of the previous fiscal year (FY25).
Furthermore, after accounting for refunds, the net tax revenues for the government reached Rs 1.69 lakh crore, reflecting a 0.6 percent increase compared to October 2024.
The month of October witnessed strong consumer demand following the September 22 rate cuts, aimed at broader economic reforms. The government noted that the recent GST reductions have benefitted consumers during the festive season, as consumption is a critical driver for growth.
With the ongoing GST reforms, there’s a high likelihood that consumption may escalate by more than 10 percent this year, potentially resulting in an additional consumption of approximately Rs 20 lakh crore.
“The notable rise in gross GST collections demonstrates a robust festive season, increased demand, and a tax structure that businesses have effectively adapted to. This is a positive sign indicating that both consumption and compliance are progressing favorably,” stated Abhishek Jain, Partner and National Head-Indirect Tax at KPMG in India.
In September, GST revenues increased by 9.1 percent year-on-year, reaching Rs 1.89 lakh crore. During the second quarter of FY26, collections amounted to Rs 5.71 lakh crore, representing a 7.7 percent year-over-year growth.
Meanwhile, India's net direct tax revenue rose by 6.33 percent, exceeding Rs 11.89 lakh crore in the current fiscal year up to October 12. The Income Tax Department reported that the total gross direct tax collection was Rs 13.92 lakh crore, an increase from Rs 13.60 lakh crore during the same timeframe last fiscal.
This growth was propelled by stronger corporate tax collections and a decrease in refund disbursements. Corporate tax receipts grew to Rs 5.02 lakh crore from Rs 4.91 lakh crore, while non-corporate tax collections (including individuals and HUFs) rose to Rs 6.56 lakh crore from Rs 5.94 lakh crore.
Point of View
It is evident that the increase in GST collections signals a positive shift in consumer behavior and economic resilience. The government’s proactive measures in reducing rates have evidently stimulated demand during a crucial festive period. This trend not only reflects enhanced compliance but also positions India on a growth trajectory that is crucial for the fiscal landscape.
NationPress
01/11/2025
Frequently Asked Questions
What is the GST collection for October?
The GST collection for October is approximately Rs 1.96 lakh crore, reflecting a 4.6 percent increase year-on-year.
How much have GST collections risen this fiscal year?
During the April-October period of FY26, GST collections rose by 9 percent to about Rs 13.89 lakh crore.
What has driven the rise in GST collections?
The increase in GST collections has been driven by robust consumer demand during the festive season and the impact of recent rate cuts.
What does the government predict for consumption this year?
The government predicts that consumption may increase by more than 10 percent this year due to ongoing GST reforms.
How does the growth in GST collections impact the economy?
The growth in GST collections indicates a positive trend in consumption and compliance, which are critical for economic stability and growth.
