New Delhi – India’s Goods and Services Tax (GST) collections reached ₹1.96 lakh crore in October 2025, marking a 4.6% increase compared to the same month last year. This rise comes despite significant tax cuts implemented by the central government in September, indicating resilient economic activity and consumer spending during the festive season. The gross GST collections in October 2025 were higher than the ₹1.87 lakh crore collected in October 2024. ### Rece^[1][2][3]nt Tax Reforms Boost Spending The central government’s GST Council rolled out substantial tax cuts in September 2025, with a new simplified two-tier structure becoming effective from September 22. This reform^[1][4][5] streamlined the previous multi-level tax system, largely replacing the 12% and 28% slabs with new rates of 5% and 18% for most goods and services. The council^[6][5] reduced GST rates on 375 items, including everyday essentials like kitchen staples, medicines, and larger purchases such as automobiles and electronics. For instanc^[2][3][4]e, GST on automobiles and electronic appliances dropped from 28% to 18%. Dairy produ^[5]cts like paneer and chhena became tax-free, while butter, ghee, and cheese saw their rates cut from 12% to 5%. Prime Minis^[4]ter Modi had announced these upcoming GST reforms on August 15, 2025, promising reduced rates before Diwali. The govern^[6]ment aimed to ease the tax burden on consumers and boost domestic consumption, particularly ahead of the festive season. Initial dat^[4][7]a suggested that many consumers paused purchases of high-value goods, like automobiles and white goods, in early September, anticipating the lower rates. However, fo^[8][9]llowing the rate cuts, demand surged, with Finance Minister Nirmala Sitharaman stating that consumption increased by 10%, adding ₹20 lakh crore in consumer spending. This shift in^[10] consumer behavior contributed to the October collections, which primarily reflect business activities from September. ### Analyzin^[10]g the Collection Numbers The gross GST collection of ₹1.96 lakh crore in October 2025 represents the fifth highest monthly collection since the tax regime began in 2017. However, the 4.^[10]6% year-on-year growth marks the slowest pace this fiscal year, compared to an average growth rate of around 9% in previous months. In August and S^[1][8][2][3]eptember 2025, GST collections had grown at 6.5% to ₹1.86 lakh crore and 9.1% to ₹1.89 lakh crore, respectively. A breakdown of the^[8][3][11] October figures shows that gross domestic revenue, an indicator of local sales, grew by 2% to ₹1.45 lakh crore. Meanwhile, tax collec^[1][2][3]ted from imports saw a robust increase of nearly 13% to ₹50,884 crore. After accounting for re^[1][2][3]funds, the net GST revenue stood at ₹1.69 lakh crore, showing a marginal 0.2% year-on-year growth. GST refunds experienced a^[1][2][3] significant jump, rising by 39.6% year-on-year to ₹26,934 crore in October. This increase in refunds re^[1][8][2][3]leases working capital for businesses, especially exporters. The collection comprised ₹^[10]36,547 crore in Central GST (CGST), ₹45,134 crore in State GST (SGST), and ₹1,06,443 crore in Integrated GST (IGST). Cess collections amounted to ₹7,8^[12][13]12 crore, which was sharply down both year-on-year and sequentially. This reduction in cess is due to it^[12][9]s removal for several key items, including small cars, which saw their GST rate cut from 28% to 18%. ### Economic Factors and Expert Vi^[9]ews The rise in October GST collections is largely attributed to strong demand during the festive season. The period from September 22, coinc^[1][2][3]iding with the start of Navratri, is traditionally auspicious for new purchases, contributing to increased sales. The recent tax cuts also played a c^[2][3]rucial role by making many items more affordable, further stimulating consumer spending. This combination of lower tax rates^[7] and festive enthusiasm helped maintain revenue buoyancy for the government. Experts widely view the latest fig^[12]ures as a positive sign for the economy. Pratik Jain, a Partner at Price Waterhouse & Co LLP, noted that despite substantial rate cuts, a slight increase in domestic GST collection is encouraging and indicates steadily increasing demand. He added that consistent increases ^[1][3]in GST refunds show confidence from tax administration that collections will trend positively in the future. Saurabh Agarwal, a Tax Partner at E^[1][3]Y India, highlighted that the collections reflect muted momentum due to the rate rationalization effect and deferred consumer spending, but anticipated robust numbers for the next month. Mahesh Jaising, Partner and Indire^[3][10]ct Tax Leader at Deloitte India, commented that the GST collection numbers underscore the economy's resilience amid festive momentum and improved compliance. He believes this fiscal strength em^[3]powers the government to pursue "GST 2.0" reforms, focusing on streamlining rates, curbing evasion, and simplifying compliance. Vivek Jalan, Partner at Tax Connect^[3] Advisory Services, affirmed that the 4.6% growth confirms that increased consumption has, to some extent, balanced the revenue de-growth caused by tax rate cuts. ### The Road Ahead: November Outlo^[3][11]ok Government officials and experts anticipate a stronger rebound in GST collections for November. The November figures will fully ref^[8][9]lect the impact of October's business activities, which saw the full swing of post-rate cut festive buying. The auto industry, for example, rep^[10]orted a robust 17% year-on-year jump in domestic passenger vehicle sales in October, signaling healthy consumer demand. Analysts from Bank of Baroda sugges^[9]ted that a lot of spending was held back in early September, which then materialized with the new GST structure. The government's "GST 2.0" strateg^[7]y aims for further simplification and a tech-driven tax ecosystem. Future reforms are expected to focu^[3][10]s on streamlining rates, curbing evasion, and simplifying compliance for businesses. The continued strength in GST colle^[3]ctions, despite the recent rate reductions, validates the government's approach to simultaneously boost local consumption and ensure revenue buoyancy. The steady rise in GST collections^[12][10], even with tax cuts, demonstrates India's economic resilience and the positive impact of reforms aimed at stimulating consumer spending and enhancing tax compliance.