India’s October GST Collection Rises 4.6% Despite Ongoing Tax Reductions

India’s Goods and Services Tax (GST) revenue for October 2025 rose to ₹1.95 lakh crore, marking a 4.6% increase compared to the same period last year. The steady growth came despite recent tax reductions on essential goods and certain consumer items, signaling continued economic resilience and strong domestic demand.

According to data released by the Ministry of Finance, the October GST collections included ₹34,000 crore from Central GST (CGST), ₹42,000 crore from State GST (SGST), and ₹1.09 lakh crore from Integrated GST (IGST), which also included ₹38,000 crore collected on imports. Additionally, ₹10,000 crore came from cess collections.

Officials noted that while the growth rate was moderate compared to earlier months, the performance is commendable given the government’s recent moves to rationalize tax rates in sectors such as textiles, small-scale manufacturing, and food products. These reductions were aimed at easing inflationary pressure on households while maintaining fiscal discipline.

A senior finance ministry official stated, “The rise in October’s GST collection reflects the underlying strength of India’s consumption-driven economy. Even after tax rate cuts, the growth in revenue shows better compliance, digital tracking, and improved business sentiment.”

Economists believe that the festive season spending in October played a major role in driving higher tax receipts. Increased sales of automobiles, electronics, and consumer durables during Diwali and Dussehra significantly boosted supply chain activity, leading to higher tax collections.

Despite the positive numbers, challenges remain. Several states have raised concerns about the slowing pace of compensation payments and the need for more predictable revenue flows. Experts warn that while the growth in collections is steady, the central and state governments must continue improving tax administration and expanding the taxpayer base to sustain momentum.

Analysts from CRISIL and ICRA noted that GST revenue above ₹1.9 lakh crore for consecutive months indicates a stable tax environment. They expect collections to remain strong in the coming months due to festive demand, steady manufacturing output, and growing e-commerce activity.

The government is also focusing on enhancing compliance through new technological measures. The introduction of AI-based invoice matching and stricter tracking of fake invoices has already led to a reduction in tax evasion cases. As a result, the overall tax base has grown, with more businesses coming under the GST net.

Finance Minister Nirmala Sitharaman, in her statement, expressed confidence that India’s GST revenue will continue to perform well through FY2025-26. “Our focus remains on simplification, compliance, and fairness in taxation,” she said.

With economic indicators pointing toward sustained growth and consumer confidence remaining high, India’s GST performance in October stands as a reassuring sign for policymakers. It also suggests that the government’s strategy of balancing tax cuts with digital efficiency is beginning to show results.