GST revenue buoyancy continues despite rate cuts

New Delhi: Buoyancy in government revenue continues despite a significant reduction in indirect tax rates on a number of items, as mop-up from GST rose to Rs 1.75 lakh crore in December, which is 2.51% higher when compared with the previous month, as per data released by the Union Finance Ministry on Thursday.

On a year-on-year basis, the gross GST revenue collection was marginally lower. In December 2024, the gross collection was Rs 1.76 lakh crore. This included Rs 12,301 crore in compensation cess.

After adjusting the compensation cess, the revenue collection in December is higher by 6.1% on a year-on-year basis.

Gross revenue from domestic transactions increased by 1.2% to Rs 1.23 lakh crore, while revenues from imported goods jumped by 19.7% to Rs 51,977 crore during the month under review.

“GST collections for December 2025 reflect continued revenue buoyancy, underscored by strong festive-season consumption and the positive impact of recent rate rationalisation measures,” said Mahesh Jaising, Partner & Indirect Tax Leader, Deloitte India.

Net GST revenues (after adjusting refunds) stood at over Rs 1.45 lakh crore in December, which is 2.2% higher when compared with the same month last year. There was a sharp jump in refunds. Domestic refunds surged by 62%. However, export refunds were 1.9% lower. Overall, Rs 28,980 crore refunds were claimed in December, which is 30.9% higher year-on-year.

Vivek Jalan, Partner at Tax Connect Advisory Services, said refunds during December jumped as the GST rate rationalisation resulted in inverted duty structure in many sectors like packaging, farming and pharma.

“All such taxpayers had applied for inverted duty refunds in November 2025 and received the same in December 2025,” Jalan said. Inverted duty structure occurs when the GST rate on inputs is higher than the rate on outward supplies.

Total GST revenue collection in the April-December period stood at Rs 16.50 lakh crore, which is 8.6% higher than the corresponding period of the previous year.

Analysts had feared a sharp drop in GST revenue following the implementation of GST 2.0. With effect from September 22, GST rates have been reduced substantially on a number of items including cars, two-wheelers, consumer durables, and daily essentials.

“Despite the steep cut in GST rates earlier this year, a growth of around 6% in gross monthly collection is encouraging, though it’s largely attributable to imports,” said Pratik Jain, Partner, Price Waterhouse & Co LLP.

“If this momentum continues for the remaining months of this fiscal, the YoY growth of around 9% is still possible, which seems to be the target the government might also be looking at,” Jain added.

Stacking Up

Data shows wide variation in GST revenue collection among states. While the states like Maharashtra, Gujarat, Haryana and Bihar registered high double-digit growth, revenue collection in Delhi, Punjab, Jharkhand, Odisha and Chhattisgarh was lower when compared with the same month, last year. Karnataka’s GST revenue collection in December was 5% higher at Rs 6,716 crore. Maharashtra posted 15% growth, while it increased by 12% in Gujarat.