CA Sansaar
GST Revenues Hit One-Year Low Despite Recent Rate Reductions
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India’s GST collection fell to its lowest level in a year in November, disappointing expectations that the recent GST rate cuts (effective from September 22) would boost consumer spending. November’s gross GST collection — based on transactions made in October — was ₹1,70,276 crore, only slightly higher than ₹1,69,016 crore collected in November 2024.
In comparison, October’s collection was much higher at ₹1.96 lakh crore, reflecting strong economic activity before the rate cuts and the festive season rush. In November, revenue from domestic sales dropped by 2.3% to ₹1,24,300 crore, while GST collected on imports increased by 10.2% to ₹45,976 crore. After issuing refunds, the net GST collection stood at ₹1,52,079 crore, showing a small 1.3% rise over November 2024.
State-wise data showed mixed trends. Manufacturing-heavy states such as Maharashtra, Gujarat, Tamil Nadu, and Karnataka recorded growth, while consumption-driven states saw a decline. West Bengal’s SGST revenue fell 9% to ₹3,711 crore, and Uttar Pradesh saw a 4% drop.
Experts noted that although GST collections were expected to soften due to rate cuts, a rise in consumption was anticipated — but it has not yet materialised. Analysts also highlighted that the picture would look weaker if compensation cess was included, as cess collections have fallen sharply — by almost two-thirds — mainly because only tobacco remains under the cess category, while items like aerated drinks and motor vehicles are no longer included.
In comparison, October’s collection was much higher at ₹1.96 lakh crore, reflecting strong economic activity before the rate cuts and the festive season rush. In November, revenue from domestic sales dropped by 2.3% to ₹1,24,300 crore, while GST collected on imports increased by 10.2% to ₹45,976 crore. After issuing refunds, the net GST collection stood at ₹1,52,079 crore, showing a small 1.3% rise over November 2024.
State-wise data showed mixed trends. Manufacturing-heavy states such as Maharashtra, Gujarat, Tamil Nadu, and Karnataka recorded growth, while consumption-driven states saw a decline. West Bengal’s SGST revenue fell 9% to ₹3,711 crore, and Uttar Pradesh saw a 4% drop.
Experts noted that although GST collections were expected to soften due to rate cuts, a rise in consumption was anticipated — but it has not yet materialised. Analysts also highlighted that the picture would look weaker if compensation cess was included, as cess collections have fallen sharply — by almost two-thirds — mainly because only tobacco remains under the cess category, while items like aerated drinks and motor vehicles are no longer included.
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