GST collection grows at slower pace of 4.6% in October at Rs 1.96 lakh cr after tax cuts

New Delhi: Festive buying spree unleashed by lower tax rates pushed gross GST collection to about Rs 1.96 lakh crore in October, registering a 4.6 per cent year-on-year growth -- the slowest rate so far this fiscal.

The slowest pace of revenue growth in October comes after Goods and Services Tax (GST) rates on 375 items, from kitchen staples to electronics and automobiles, were slashed with effect from September 22 -- the first day of Navratri.

According to the government data released on Saturday, gross GST mop-up in October was about Rs 1.96 lakh crore, a 4.6 per cent higher over Rs 1.87 lakh crore collections in October 2024.

The gross domestic revenue, an indication of local sales, grew 2 per cent to Rs 1.45 lakh crore, while tax from imports surged about 13 per cent to Rs 50,884 crore in October.

The rate of growth in gross GST collections in year-on-year terms in October at 4.6 per cent is, however, lower than about 9 per cent average growth in GST mop-up so far this fiscal.

In August and September this year, GST collection grew at 6.5 per cent to Rs 1.86 lakh crore and at 9.1 per cent to Rs 1.89 lakh crore, respectively.

The October GST collection number reflects the impact of festive season sales and the pent up demand. Consumers had held back their purchase decision, awaiting GST rate cut after Prime Minister Narendra Modi in his Independence Day speech had announced that GST rates will be cut ahead of Diwali. The rate cut was, however, implemented with the onset of Navratri.

As per the data, GST refunds jumped 39.6 per cent year-on-year in October to Rs 26,934 crore.

Net GST revenue, after adjusting refunds, stood at Rs 1.69 lakh crore in October 2025, recording 0.2 per cent YoY growth.

Price Waterhouse & Co LLP Partner Pratik Jain said despite massive rate cuts effective from September 22, a slight increase in domestic GST collection shows that demand is steadily increasing.

"Consistent increase in GST refunds (domestic as well as exports) shows confidence of tax administration that GST collections would show positive trend in future as well," Jain said.

EY India Tax Partner Saurabh Agarwal said GST collections reflected a muted momentum in tax collection primarily due to rate rationalisation effect and the deferred consumer spending ahead of the festive season.

This anticipated lag is likely to be compensated by more robust numbers in the next month, driven by seasonal buoyancy.

Deloitte India, Partner & Indirect Tax Leader, Mahesh Jaising said the GST collection numbers underscores the resilience of economy amid festive momentum and enhanced compliance.

This fiscal strength arms the government with the bold resolve to drive GST 2.0 reforms -- streamlining rates, curbing evasion and simplifying compliance -- propelling India toward a truly seamless, tech-driven tax ecosystem.

Tax Connect Advisory Services Partner Vivek Jalan said the growth in collections by 4.6 per cent re-affirm that the boost in consumption has, to an extent, balanced the de-growth in revenue due to the tax rate cuts.

According to Jalan, the sustained buoyancy in receipts despite significant rate-rationalisation underscores that the reforms are stimulating consumption rather than constraining it. Also, refund disbursements surged nearly 40 per cent YoY, which is a clear indication of improved compliance discipline and smoother credit flows for business.

"Meanwhile, import-linked IGST inflows rose nearly 13 per cent, signalling healthy demand for raw materials and capital goods and pointing to a strong industrial output cycle. Major states such as Karnataka, Maharashtra, Gujarat, Tamil Nadu, Haryana and Uttar Pradesh anchored this growth, benefiting from manufacturing revival, services expansion and a strong festive uptick in a challenging global environment," Jalan said.

Grant Thornton Bharat, Partner and Tax Controversary Management Leader, Manoj Mishra said early retail indicators show broad-based demand across autos, FMCG, apparel and electronics, reflecting renewed consumer confidence.

"With India's vast household consumption base and an industrial revival now increasingly complementing services-led growth, the October GST data affirm that India's growth story is both broadening and deepening," Mishra said.