India's GST Collections Surge 4.6% to Rs 1.96 Lakh Crore in October Despite Rate Cuts

New Delhi:

The Goods and Services Tax (GST) collections increased by 4.6 percent year-on-year during October's festive month, reaching approximately Rs 1.96 lakh crore despite recent rate rationalization measures, according to official data released on Saturday.

October marked the tenth consecutive month where GST revenues exceeded the Rs 1.8 lakh crore threshold.

Government data indicated that GST collections grew 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 period of the previous fiscal year (FY25).

Further analysis revealed that net tax collections after refunds amounted to Rs 1.69 lakh crore in October, representing a modest 0.6 percent increase over October 2024.

October witnessed strong consumer demand following the September 22 rate reductions, which were implemented as part of broader tax and economic reforms. Government officials noted that benefits from recent GST reductions have been passed on to consumers during the festive season, supporting consumption as a key growth driver.

The GST reforms are expected to boost consumption by more than 10 percent this year, potentially generating additional consumption of approximately Rs 20 lakh crore.

"The higher gross GST collections reflect a strong festive season, higher demand and a rate structure that has been well absorbed by businesses. It is a positive indicator of how both consumption and compliance are moving in the right direction," stated Abhishek Jain, Partner and National Head-Indirect Tax at KPMG in India.

GST revenues had previously increased by 9.1 percent year-on-year in September, reaching Rs 1.89 lakh crore. During the second quarter of FY26, collections totaled Rs 5.71 lakh crore, representing a 7.7 percent year-over-year increase.

Meanwhile, India's net direct tax revenue rose by 6.33 percent to over Rs 11.89 lakh crore in the current fiscal year (up to October 12). The Income Tax Department reported that gross direct tax collection stood at Rs 13.92 lakh crore, up from Rs 13.60 lakh crore during the same period last fiscal.

This strong tax performance was driven by more robust corporate tax collections and slower refund disbursements. Corporate tax receipts increased 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.