What Factors Contributed to the 9.1% Rise in GST Revenues in September?
Click to start listening
Synopsis
India's GST revenues surged by 9.1% in September, reaching Rs 1.89 lakh crore. This marks the fastest increase in four months, despite weak consumer spending. The government's push for GST rationalization may boost consumption and investment. Read on for key insights into India's economic landscape.
Key Takeaways
- GST Revenues rose by 9.1% in September.
- Collections reached Rs 1.89 lakh crore.
- Fastest growth in four months.
- Weak consumer spending on non-durables.
- GST rationalization to improve consumption.
New Delhi, Oct 1 (NationPress) India’s Goods and Services Tax (GST) revenues experienced a significant increase of 9.1 percent year-on-year in September, amounting to Rs 1.89 lakh crore, as per the data released by the government on Wednesday.
This growth indicates the steepest rate in the past four months and extends the series of monthly collections exceeding Rs 1.8 lakh crore for nine successive months. The recent surge marks a notable improvement compared to the 6.5 percent growth recorded in August.
Interestingly, this rise occurred despite declining consumer spending on non-durables, as shoppers delayed purchases in expectation of potential GST rate reductions.
During the second quarter of FY26, collections totaled Rs 5.71 lakh crore, representing a 7.7 percent increase year-on-year, although this is slower than the 11.7 percent growth seen in the previous quarter.
In light of the need to bolster domestic growth amid rising external sector challenges, the government has initiated a rationalization of the GST framework. This strategy aims to alleviate the tax burden on consumers, enhance consumption levels, and provide a buffer against tariff repercussions. Moreover, it is anticipated to improve demand visibility for businesses, allowing for expanded investment in additional capacities.
On another note, the Reserve Bank of India recently revised India's growth forecast upward by 30 basis points to 6.8 percent, up from its prior projection. Earlier this month, S&P Global Ratings affirmed that the economy would maintain a growth rate of 6.5 percent, with domestic demand somewhat mitigating the impact of U.S. tariffs.
Robust tax collections in recent months have considerably bolstered the country’s fiscal health and macroeconomic fundamentals, fostering stable growth.
The central government has implemented a two-slab GST rate of 5 percent and 18 percent on most goods, alongside a separate higher tax of 40 percent on sin goods like cigarettes, tobacco, and sugary beverages as part of the rationalization effort.
Point of View
It is essential to acknowledge the resilience of India's economy amidst external challenges. The recent GST revenue growth reflects underlying strength, but the government's proactive measures are critical in maintaining momentum. The rationalization of the GST framework is poised to stimulate consumption and investment, which is vital for sustained economic expansion.
NationPress
01/10/2025
Frequently Asked Questions
What was the GST revenue growth percentage in September?
The GST revenue growth percentage in September was 9.1%, reaching Rs 1.89 lakh crore.
How long has the GST revenue exceeded Rs 1.8 lakh crore?
The GST revenue has exceeded Rs 1.8 lakh crore for nine consecutive months.
What changes were made to the GST rates?
The government introduced a two-slab GST rate of 5% and 18% for most goods, with a separate 40% tax on sin goods.
What is the revised growth forecast by the Reserve Bank of India?
The Reserve Bank of India revised India's growth forecast to 6.8%, up by 30 basis points.
What impact does GST rationalization aim to have?
GST rationalization aims to reduce the tax burden on consumers, boost consumption, and enhance demand visibility for businesses.
