Strong festive demand lifts GST collections to Rs 1.96 trillion

India’s Goods and Services Tax (GST) revenue rose to Rs 1.96 trillion (£16.76 billion) in October, showing a 5 per cent increase over the same month last year, the Finance Ministry said in a statement on Saturday.

After accounting for refunds, the government’s net GST collection stood at Rs 1.69 trillion (£14.45 billion), marginally higher by 0.6 per cent compared with October 2024.

The rise in collections comes soon after the government reduced GST rates on several consumer products, including shampoo and small cars. The new rates came into effect on September 22, aligning with the start of the festive season.

Officials said the complete impact of the rate reductions on state revenues will be visible in the coming months, as GST is collected with a lag.

Commenting on the latest figures, Abhishek Jain, partner at KPMG, said, “The higher gross GST collections reflect a strong festive season and higher demand … It is a positive indicator of how both consumption and compliance are moving in the right direction.”

Economists say that the October collections indicate resilience in consumer spending during the festive period, supported by improved compliance and stable economic activity.

(With inputs from Reuters)