India’s Goods and Services Tax (GST) collections demonstrated robust growth in September, reaching an impressive ₹1.89 lakh crore. This near double-digit surge occurred despite the implementation of reduced tax rates during the latter half of the month.
Compared to the same period last year, September’s GST collections saw a healthy 9.1% increase. Furthermore, they climbed over 1.5% from the previous month’s figures. Official government data, released on Wednesday, October 1, 2025, confirms that the gross GST mop-up in September 2024 was ₹1.73 lakh crore, while the collection for the preceding month (August 2025) stood at ₹1.86 lakh crore.
A key factor influencing these numbers is the ‘GST 2.0’ reform, particularly the rate rationalization measures that took effect on September 22. These reforms are clearly reflected in the latest collection data.
The rate cuts, which made as many as 375 items more affordable – ranging from everyday kitchen essentials to electronics, medicines, equipment, and automobiles – likely fueled increased consumer demand during the latter part of September.
Looking at broader revenue trends, the gross domestic revenue for the month grew by 6.8% to ₹1.36 lakh crore. Additionally, taxes derived from imports saw a substantial 15.6% rise, contributing ₹52,492 crore to the total.
However, it’s worth noting that GST refunds also experienced a sharp increase, jumping 40.1% year-on-year to ₹28,657 crore. Despite this, the net GST revenue for September 2025 settled at a strong ₹1.60 lakh crore, marking a 5% year-on-year growth.
MS Mani, a partner at Deloitte India, commented on the robust collections, suggesting that the ₹1.89 lakh crore figure for September indicates no significant economic slowdown in anticipation of the GST rate cuts in August, as this data primarily reflects transactions from August.
He added that with these latest September collections, the average monthly GST revenue for the current financial year (FY26) is just shy of ₹2 lakh crore. This represents a substantial improvement compared to FY25, where the average monthly collections until September 2024 were around ₹1.8 lakh crore.
Vivek Jalan, a partner at Tax Connect Advisory, explained that the combined effect of increased consumption post-September 22 (due to rate cuts) and a slight dip in demand from September 1-21 (in anticipation of those cuts) appears to have balanced out in terms of overall GST revenues.
However, he pointed out a lingering imbalance in consumption within major manufacturing states like Maharashtra, Gujarat, Tamil Nadu, and Karnataka. This was likely due to a slowdown in inter-state stock transfers and supplies until September 21, stemming from concerns over Input Tax Credit (ITC) accumulation following the rate reduction, and a continued slowdown after September 22 due to vehicle scarcity.