GST net revenues inch up 0.6% in October; refunds jump nearly 40% - Business Standard
Growth in India’s net revenues from the goods and services tax (GST) softened to 0.6 per cent year-on-year (Y-o-Y) in October, the slowest so far in FY26, as businesses adjusted to the recent GST rate cuts and the government processed higher refunds. Still in absolute terms, net collections remained strong at Rs 1.69 trillion, making October the third best month of FY26 after April and May. In October last year, the net GST mop-up stood at Rs 1.68 trillion, while on a month-on-month basis, it grew 5.4 per cent from Rs 1.60 trillion in September.
Gross GST receipts in October stood at ₹1.96 trillion, an increase of 4.6 per cent year-on-year, supported by strong import-linked collections, which grew 12.8 per cent. Domestic GST revenues rose 2 per cent to ₹1.45 trillion. In the first seven months of FY26, net GST revenues have risen 7.1 per cent to ₹12.07 trillion, while gross collections have increased 9 per cent to ₹13.89 trillion.
Tax experts attributed the soft print to the rate cut-induced recalibration by businesses and postponement of supplies in the run-up to the revised GST slabs from September 22. October GST collections reflect transactions undertaken in September, and therefore capture only a partial impact of the GST rate rationalisation.
“The GST collections, while aligning with immediate expectations, reflect a muted momentum due to the rate rationalisation effect in the majority part of September month and deferred consumer spending ahead of the festival season. This anticipated lag is likely to be compensated by more robust numbers in the next month driven by seasonal buoyancy,” said Saurabh Agarwal, tax partner, EY India.
Refunds surged 39.6 per cent in October, continuing the government’s push to streamline processing and ease working capital pressures for exporters and domestic firms. Domestic refunds rose 26.5 per cent to Rs 13,260 crore, while export refunds jumped 55.3 per cent to Rs 13,675 crore.
Also Read
“Consistent increase in GST refunds shows confidence of the tax administration that GST collections would show positive trend in future as well. Next month's data would have the full impact of GST cuts and would be keenly awaited," said Pratik Jain, partner, Price Waterhouse & Co LLP.
Smaller and emerging regions such as Arunachal Pradesh (44 per cent), Nagaland (46 per cent), Lakshadweep (39 per cent) and Ladakh (39 per cent) led the growth .However, several states including Himachal Pradesh (-17 per cent), Jharkhand (-15 per cent), Uttarakhand (-13 per cent) and Andhra Pradesh (-9 per cent) saw declines.
“Several states have recorded negative growth compared with the same month last year and some have shown very marginal growth. It is essential to deep dive into the sectoral GST collections to understand the reasons for the same and develop a policy framework to enable all states to grow their GST revenues,” said M S Mani, partner, Deloitte.
The higher gross GST collections reflect a strong festival season, higher demand and a rate structure well absorbed by businesses, according to Abhishek Jain, Indirect Tax head & partner, KPMG. "It is a positive indicator of how both consumption and compliance are moving in the right direction," he said.
Mani added that the marginal increase in GST collections with significantly reduced rates indicate that consumption remains robust as brought out by other economic indicators as well.