Imports, low base fuel best October GST growth in four years

India’s goods and services tax (GST) collections clocked their fastest October growth in four years, official data showed. The collections were buoyed by a surge in import taxes and a favourable low statistical base from last year.

Provisional government data released on Sunday showed gross GST collections jumped 22.9% year-on-year to ₹2.31 trillion in October, boosted by a 42.2% surge in import-related revenue and a rebound from last October's subdued consumption ahead of GST rate revisions.

Revenue from imports rose to ₹72,246 crore, while domestic GST collections grew 15.8% to ₹1.59 trillion from ₹1.37 trillion a year earlier, the data showed.

The latest growth marked a sharp acceleration from the 4.6% recorded in October last year, and also exceeded the 8.9% growth seen in October 2024, 13.4% in October 2023 and 16.6% in October 2022.

The rise in GST mop-up comes amid a favourable base. October 2025 was the first full month after tax rate rationalization took effect in September.

“October’s GST growth was driven by both sequential gains and a favourable base effect, as collections in October last year were relatively low," said Madhavi Arora, chief economist at Emkay Global.

Some other experts, however, said the latest growth remains significant as it comes with the tax rates lowered. “Before the reforms, GST had four main slabs of 5%, 12%, 18% and 28%. The revised structure largely moved to two main slabs of 5% and 18%, with a higher 40% rate only for select demerit and luxury goods. The growth indicates GST revenue mobilization has remained strong despite rationalization of tax rates," said Saurabh Agarwal, tax partner at EY India.

October marked the fourth month this fiscal in which GST collections topped the ₹2 trillion mark and the second-highest monthly mop-up on record, after the ₹2.43 trillion collected in April 2026. Collections were at ₹2.11 trillion in July and ₹2.04 trillion in September.

The sharp rise in import-linked collections points to stronger revenue mobilization from imported goods, although the data does not distinguish between the effects of higher import volumes and changes in import values. Domestic revenue accounted for nearly 69% of gross GST collections in October, with imports contributing the remaining 31%. The government will detail October imports data mid-November.

Net GST collections, after refunds, rose 25.6% to ₹2.03 trillion from ₹1.62 trillion a year earlier, outpacing the growth in gross revenue. Total refunds increased a more modest 6.5% to ₹27,934 crore.

Domestic refunds rose 9.8% to ₹14,007 crore, while export-related refunds processed through ICEGATE increased 3.4% to ₹13,927 crore. Net domestic revenue grew 16.4% to ₹1.45 trillion, while net customs revenue jumped 56.2% to ₹58,319 crore.

For April-October, the first seven months of the fiscal, gross GST collections rose 13.2% to ₹14.78 trillion from ₹13.05 trillion a year ago. Net collections increased 12.6% to ₹12.69 trillion.

Domestic gross GST revenue grew 7.4% to ₹10.33 trillion during the seven-month period, while import-related revenue climbed 29.3% to ₹4.44 trillion.

Nitin Vijaivergia, partner at Price Waterhouse & Co LLP, said October's GST collections reflected “strong revenue momentum”. While domestic collections grew 15.8%, import revenues surged 42.2%, highlighting the growing contribution of imports to overall GST revenue. He said the trend merited attention from a domestic manufacturing perspective.

The cumulative collections for April-October indicated that revenue buoyancy extended beyond a single month, he added.

Experts said the sustained growth in import-linked collections highlights the need to strengthen domestic manufacturing capabilities.

While the production-linked incentive (PLI) schemes have delivered encouraging results in select sectors, the government may need to revisit and recalibrate schemes in sectors with unutilised budgets to better support the broader objective of an Atmanirbhar Bharat, they said.

“The GST collections for October 2026 reflect the continued resilience of the Indian economy, despite persistent global headwinds. The steady month-on-month rise in revenue indicates strong underlying consumption and improving compliance,” said Saurabh Agarwal, tax partner at EY India.

“The festive season should keep demand buoyant, and collections for the coming month are likely to remain strong. Businesses should use this period to keep their compliance and reconciliation processes robust, so that the benefits of this growth are sustained,” Agarwal said.

The latest collections come amid a broader push to reform the GST framework.

M.S. Mani, partner at Deloitte India, said sustained revenue buoyancy, despite the rate cuts introduced last year, was giving the GST Council the confidence and headroom to advance reforms focused on faster refunds, smoother credit flows and reducing compliance friction for businesses.

At its 57th meeting, held in New Delhi on 8 October, the Council recommended faster, system-based refund processing, wider eligibility for input tax credit (ITC) and simplified GST registration for small sellers operating through e-commerce platforms. It also recommended raising the prosecution threshold from ₹1 crore to ₹5 crore, removing arrest provisions for the tax regime and reducing the maximum general penalty from ₹25,000 to ₹10,000.

Further changes to the GST framework took effect from 1 November on notification of provisions under the Finance Act, 2026. These cover post-supply discounts, credit and debit notes, and GST refunds, including the removal of the minimum ₹1,000 threshold for export refund claims.

The measures are expected to simplify tax administration, provide greater clarity to businesses and improve compliance. Together with the wider reforms recommended by the Council, they could support revenue mobilisation in the coming months.

State-wise figures showed wide variations in domestic GST revenue growth. Among major states, Assam recorded the highest increase at 47% in October, followed by Jharkhand at 31% and Madhya Pradesh at 29%.

Uttar Pradesh and Bihar both recorded 24% growth, while Kerala's collections rose 23%. Maharashtra, the largest contributor among states, reported a 13% increase to ₹35,150 crore. Karnataka's collections grew 18% to ₹15,922 crore.

Some states, however, saw collections contract. Himachal Pradesh reported a 2% decline in domestic GST revenue, while Sikkim recorded a 28% fall. Puducherry and Ladakh registered declines of 7% and 20%, respectively.

Delhi's domestic GST collections rose 10% to ₹9,298 crore, while Haryana recorded 17% growth to ₹11,529 crore.

Post-settlement SGST revenue of states and Union territories increased 13% to ₹1.03 trillion in October. The figure includes states' own SGST collections and their share of integrated GST (IGST) settled by the Centre.

Dhirendra Kumar is a seasoned policy reporter with about 20 years of experience in deep, on-ground reporting across key economic and governance sectors. His work spans finance, public expenditure, disinvestment, public sector enterprises, textiles, trade, consumer affairs, and agriculture, with a strong focus on uncovering structural policy shifts and their real-world impact.<br><br>Kumar has been awarded the Chaudhary Charan Singh Award for Excellence in Journalism in Agricultural Research and Development, recognising his contribution to reporting on critical issues in the farm sector. He has also been a recipient of a fellowship in international trade from the National Press Foundation, which has further strengthened his coverage of global trade dynamics and their implications for India.<br><br>Kumar is known for breaking complex policy developments into clear, accessible stories. His reporting focuses on uncovering under-reported trends, explaining policy shifts, and helping readers stay informed about developments that shape India’s economic landscape.

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